Fostering Innovation Across America
March 17, 2011
05:00 PM EDT
In February, I traveled with Secretary Geithner and the President to Cleveland, Ohio to meet local business owners and discuss the challenges that they face each day. It was exciting to see the ingenuity and determination of so many entrepreneurs; the American spirit of entrepreneurial innovation remains strong, not just in Silicon Valley, but in all parts of the country. That innovation continues to be at the heart of the American economy and it has helped drive six quarters of economic growth.
However, the challenges that these business owners face cannot be ignored. In the wake of the recent financial crisis, it is difficult for so many entrepreneurs to access the capital necessary for their companies to grow. Across the Administration, as we encourage innovation and promote entrepreneurship, we are grappling with this question: How can we make sure that the next Facebook has the capital it needs to grow and succeed?
Next Tuesday, March 22, Treasury will be hosting a conference titled Access to Capital: Fostering Innovation and Growth for Small Companies. We will bring together policymakers, entrepreneurs, investors, academics, and other market participants to explore how both the public and private sectors can help promote access to capital at each phase in the lifecycle of a small company. We are committed to fostering an open dialogue about where the public sector should step in and where we should move out of the way.
Over the past few decades, there have been meaningful structural changes in the US economy. These changes have transformed the way small businesses obtain capital and have also introduced both benefits and barriers to small companies looking to grow. A variety of new funding sources have emerged including incubators, angel clubs and private placement platforms. However, many traditional sources of “bootstrap capital” from home equity loans to credit card debt are harder to come by for many entrepreneurs. It is crucial that we understand new challenges and encourage the flow of capital to parts of the market – including regions – that may be underserved and through platforms that have been underutilized.
I am excited to participate in this conference both in my role leading the small business team at the Treasury Department and as Executive Director of the President’s Council on Jobs and Competitiveness. This Administration is committed to promoting a culture of entrepreneurship and using all of the tools at our disposal to support it. Treasury’s Small Business Lending Fund and State Small Business Credit Initiative are examples of this effort. The launch of Startup America is another, as is the Small Business Administration’s listening tour, Reducing Barriers to Accessing Capital.
Tuesday’s conference will advance this dialogue by bringing together a diverse range of participants from all parts of the financing spectrum. We recognize that there may be no simple solution to many of the challenges facing entrepreneurs. In some cases, the policy levers are limited. That is why we want to have this dialogue, to gather ideas and better understand the pressing concerns of growing small businesses.
Continuing our efforts to reduce barriers for small companies is not just about the success of each business, it’s about the success of our nation’s economy. Access to capital for growing businesses is essential to fueling job creation. Small businesses create two out of every three jobs in America, and as our economy continues to recover, we need to make sure these businesses can continue to hire and grow.
For these efforts to have a meaningful effect, we need to engage the whole country in this conversation, not just the people who are able to come to Washington Tuesday. I encourage you to email questions and ideas to AccessToCapRSVP@treasury.gov by Monday evening. We will pose some of these questions to our panelists and leading Administration officials during the conference. And we will use all of them to inform our thinking as we work to continue to make sure the entrepreneurial spirit of America can thrive for generations to come.
Don Graves is currently Treasury’s Deputy Assistant Secretary for Small Business, and has recently been named as Executive Director of the President’s Council on Jobs and Competitiveness.