Definition of JOBS act

The JOBS Act, signed by Barack Obama, US president, in April 2012, stands for Jumpstarting our Business Startups.

This bipartisan bill reflects the consensus in Washington that entrepreneurs generate a disproportionate share of new jobs in our economy and policymakers should do more to support them.

However, there is a disagreement over what policies work best. Most economists believe that 'setting the table' for an entrepreneurial economy involves a strong education system with a focus on science and technology, a sensible immigration policy that attracts and retains talented individuals, good protection of intellectual property, the presence of venture capital markets, and cultivating an environment that supports risk-taking and does not punish failure. Harvard economist Josh Lerner has pointed out that Singapore and Israel are doing excellent jobs in this regard. Politicians disagree on whether the focus should be on less regulation and lower taxes or on greater investments in human capital, scientific research, and infrastructure.

The JOBS Act aims to increase access to capital by liberalising the rules around crowdfunding, providing relief to young companies from certain regulations, and expanding the pool of investors by changing the rules around general solicitation. Critics worry that these changes may have a downside in terms of weakening investor protections and allowing fly by the night operations to prey on inexperienced investors. [1]