You are here
The Future of Small Business in New England
Thank you, Saul. Not only for that kind introduction, but for the work that you and your colleagues at the Business Innovation Factory do to fuel an environment where entrepreneurs can grow and succeed.
I know you also have a new book coming out later this month about the importance of adapting business models to changing times – and I look forward to reading it.
It’s great to be here today. I have deep roots in New England. I grew up here in Boston…went to college and business school here. My husband who also is participating in this conference is from Rhode Island. And our family lives in Maine. So I think we have the region well covered.
It’s great to see so many friendly faces in the crowd and on my panel today. I was actually with Mark recently on Capitol Hill and saw him at our collaboration summit in Baltimore.
As you may know, I got active in public service after the Brunswick Naval Air Station was placed on the base closure list. The Governor of Maine asked me to look at ways to mitigate the impact. And to see how we could create new growth industries for our state.
We asked ourselves what does Maine produce that is unique and scalable? What are our region’s unique assets?
- We saw a 400-year-old tradition of boatbuilding…
- We saw the University of Maine with cutting-edge research in composite materials…
- We saw community colleges that could provide the technical skills needed to work with composites….
- And we saw new boat hulls made from these composites that were some of the lightest and fastest in the world.
So, we created the North Star Alliance, a regional cluster that leveraged the experience of local craftsman, the expertise of local universities and community colleges and the new technology being developed in the area.
Today, Maine-built boats are selling as far away as Shanghai.
One of my goals at SBA is replicating this successful and proven model across the country. And I think New England is ripe with opportunity.
We know that each region has unique assets: education and research institutions, industry expertise and geographic advantages.
We want to create regional clusters that leverage these existing assets to create a climate where entrepreneurship and small businesses can thrive.
So far we have created about 40 of these regional clusters with the cooperation of multiple government agencies – and we want to build on that.
In New England, these clusters have focused on a range of industries, including energy storage solutions and biomedical technologies.
And we are extremely excited about their ability to spur innovation, entrepreneurship and high growth small businesses across the supply chain.
One of the things that always struck me about New England (and I travel all over the country) is the role our academic institutions play in the broader success of our communities.
You are the center of the entrepreneurial ecosystem.
And it’s not just occurring in business schools. Its cutting edge research in agriculture and food science departments, computer labs, design studios and engineering schools.
Entrepreneurship and innovation is occurring in every area of your institutions. Your faculty and your researchers are brimming with expertise and experience. And my job is ensuring that these innovative ideas and knowledge can be harnessed and scaled into successful businesses.
How many of you saw the Kauffman Foundation report that recently came out on entrepreneurship?
What the report showed is a testament to something you all know well: The entrepreneurial spirit of New England remains strong.
Every region in the United States saw a drop in entrepreneurial activity between 2010 and 2011, except the Northeast, which showed a slight rise.
What I want to focus on today is how we build on this growth. And how we make sure that your colleges and universities are fully integrated into our nation’s economic growth strategy.
At the SBA, we do several things to make this possible. We call it the three Cs.
First is: Access to capital. In 2011, SBA had a record year. We supported more than $30 billion in lending to over 60,000 small businesses -- and that included more than $1.4 billion to small businesses in New England. These are businesses all over your campuses—from diners to software development companies.
Second is Contracting. We manage the government’s nearly $100 billion supply chain for small businesses. Through federal government contracting opportunities, nearly 17,000 small businesses in the New England received more than $9 billion in contracts in FY10.
Finally is Counseling. And this is the piece where you play an integral role.
How many here work for a Small Business Development Center?
We have a network of 900 Small Business Development Centers. (In this network, we have 63 Lead SBDCs…48 are University-sponsored, 8 are community-college sponsored and 7 are state-sponsored.)
In 2011, these SBDCs met the counseling and training needs of nearly 560,000 clients and they helped create more than 13,600 businesses.
These SBDCs are an essential part of our resource partner network which includes 110 Women’s Business Centers. And 12,000 participants in our Score Network. This is our bone structure. Last year, these programs reached more than 1 million small business owners.
In New England, our resource partners served nearly 24,000 clients in 2011 and helped them create 530 businesses.
In addition, our SBDCs in New England helped local companies access roughly $165 million in capital.
So when we look at the critical role that our universities and colleges play in fostering and supporting small businesses, we see two key buckets of skills training.
And both are at the heart of President Obama’s plan to create an economy that is built to last.
The first is the teaching of entrepreneurship. Business planning, marketing, financial forecasting and strategic planning. The skills needed to form and grow a small business.
The second bucket is technical skills. Having the right human capital for a 21st century American economy.
About 80 percent of America's manufacturers are having trouble finding the right people with the right skills.
Right now, we have three million jobs in this country unfilled.
I recently visited a tool and die manufacturing facility called Carbi-Tech in Pennsylvania.
It’s a family run business co-founded by Rhett Crooks. He supplies precision parts to GM.
Rhett worked with St. Vincent -- which hosts a Small Business Development Center -- to get the tools he needed to write his business plan.
Rhett employees 20 people, including his son, and he is looking to hire more. But he is having trouble finding workers with the right skills to fill those jobs. I hear that from manufacturers all over the country.
Recognizing that this mismatch exists in the manufacturing workforce, President Obama asked manufacturers to team up with educators at community and technical colleges to launch the Skills for America’s Future initiative. This will create a fast-track credentialing system for up to half a million more workers.
At SBA, we’ve partnered with the National Association of Manufacturers to develop a 16-week curriculum that will provide trainees with a new piece of knowledge or a specific skill that is highly attractive to an advanced manufacturer.
This will result in giving the trainee a good-paying job in a matter of months while helping an employer meet a pressing need on the shop floor. It’s a win-win.
So let me close with one last point…..
The United States remains the world’s largest manufacturer. We have the greatest universities and research institutions in the world. And we have the most productive and resilient workforce in the world.
And we know what happens when these three forces come together….
- Over the last two years, we’ve created 3.9 million private sector jobs.
- For the first time since the 1990s, we’re adding manufacturing jobs.
- We’ve created 440,000 good manufacturing jobs since 2010.
- We also know that more than a third of all manufacturing employees work for a small business.
- And we know the multiplier effect that manufacturing produces. For every one manufacturing job created, there are two or three indirect jobs created.
Our goal is to make sure this momentum continues.
Because that’s how you create good middle class jobs and an America that is built to last.