I took a full month off of work after my last two children were born (couldn't do it for my first born, but that is a different story). Luckily my wife is a stay at home mom and we could pull it off with one income. I think most people underestimate the value to the family of having this time off.
As an employer though, I am conflicted about mandatory policies. Actually, let me rephrase that, I am conflicted about situations in which people take massive blocks off of work - for babies or otherwise. The reason is what you would expect: As an employer I probably cannot find someone who is a direct replacement for that employee during that period.
Depending on the stage, size and speed of an organization, having a key person out of the office could potentially break the company. I know for a fact that if our CTO took a month off of work we would probably go out of business. Now, we are a three man startup so that is clearly different than massive organizations like IBM etc..., but my guess is that the majority of companies fall into the category where losing a person for a month is crippling.
So the best thing I can come up with as a strategy for maternity/paternity leave is this: The person who will be taking the leave, upon knowledge that they are pregnant should work with their employer for the following months to identify a temporary hire who can do their work in their absence. Assuming the company could handle it, the company would absorb the new hire cost from hide, but if not a negotiation should be made about half-pay or some other compensation such that the company can afford the hire.
Without government or some other entity actually ponying up money that would compensate the company for the absence, I don't see any way to balance those books for up and coming businesses.
I should just add that at the end of the day, customers don't care that your employee just had a baby, they just want their product to work. Except in rare cases customers do not seem to be at a place where they are willing to absorb a cost like this so inevitably the cost is either born by the employer or is forced to be socialized (not a bad word here) through regulation.