Statement of Ranking Member Nydia Velázquez before Full Committee hearing entitled: “A Job Creation Roadmap: How America’s Entrepreneurs Can Lead Our Economic Recovery”

STATEMENT
Congresswoman Nydia Velazquez, Ranking Member

Committee on Small Business

“A Job Creation Roadmap: How America’s Entrepreneurs Can Lead Our Economic Recovery”

Wednesday, March 21, 2012

Thank you, Chairman Graves.

The nation’s 29 million small firms are the backbone of the economy, employing over half of all private sector employees and generating two-thirds of net new jobs over the past 15 years.  As a result, their contributions are essential to the economic recovery.  By starting new endeavors and developing cutting-edge products, entire industries, as well as the overall economy, are renewed and energized.  In fact, approximately 565,000 new businesses per month were created in 2010 – the highest level over the past decade.  During today’s hearing, we will have an opportunity to examine the unique role that entrepreneurs have played in the current economic recovery.

All small businesses are helping the economy grow, but it is the “opportunity entrepreneurs” that hold true promise in America’s recovery. While it is important to encourage entrepreneurship of all types, it is especially true for these businesses that hold the potential for higher rates of job creation. These fast growing firms are typically undertaken out of a market opportunity by choice rather than necessity. 

Fostering innovators who are determined to turn their dreams into reality benefits the entire economy since high-impact firms create new markets and increase competition. This has a multiplier effect on job creation as new enterprises and innovators are drawn into the new market.

However, starting a business prior to the recession simply required a good idea, solid work ethic, and Internet access.  But in today’s recuperating economy, forming a business has become a necessity for some.  Essential to their success is adequate startup financing and the necessary technical assistance to grow and prosper. 

The financial crisis created a unique set of challenges for small firms seeking capital.  As lending standards tightened, entrepreneurs found it more difficult to secure loans and lines of credit.  While this situation is improving, there is still a long way to go.  SBA’s loan programs have played a critical role in bridging these gaps, providing startups with access to the capital they need to startup and expand.

Another area critical to the success of a business is technical assistance.  SBA’s programs assist entrepreneurs by providing tailored education on everything from marketing, to procurement, to international trade.  For a startup, this expertise can often make the difference between failure and long-term growth.  These initiatives, like the Small Business Development Centers, have proven to be effective in delivering counseling and assistance to millions of entrepreneurs across the country. 

While the SBDC network is the SBA’s largest entrepreneurial assistance program it nevertheless faces challenges.  With lower budgets and increased levels of demand, it is between a rock and a hard place.  Today, we will hear how the SBDC network is adjusting to new fiscal realities and what actions are needed moving forward to help the nation’s hardworking innovators.

Startups and small businesses of all types are the key to renewed growth in local communities and the economy as a whole.  Currently, this sector is experiencing growth as more immigrant entrepreneurs and older professionals start businesses.  In order to facilitate their success, it is critical that as dynamics change, the strategies for supporting them also evolve.

Entrepreneurship is uniquely part of the American culture and embedded in our national philosophy.  This hearing gives us the opportunity to hear from a business founder regarding his experience in starting a business and the challenges he overcame to become successful. It will give the committee insights into areas of achievement, as well as areas where entrepreneurs still face the greatest obstacles. 

In advance of the testimony, I also want to thank all the witnesses who traveled here today for both their participation and insight into this important topic. 

Thank you and I yield back.