STATEMENT
of the
The Honorable Nydia Velazquez, Chairwoman
House Committee on Small Business
“Small Business Competition Policy: Are Markets Open for Entrepreneurs?”
Thursday, September 25, 2008

Competition is the crux of our economy. It not only drives innovation and development, but it also spurs invention. After all, you don’t often see new products originating in unchallenged industries. Rather, they come from diverse sectors that promote a wide range of options.

In a free market economy, it is crucial that all business--large and small--have a level playing field. The FTC is charged with making sure that happens. With this in mind, it is important for the commission to be engaged and prevent industries from isolating themselves. A lack of competition does not benefit the economy, and it certainly does not benefit the tax payer.

In recognizing this fact, the FTC already has a number of antitrust provisions in place. The commission’s Bureau of Competition, for example, uses both administrative and judicial means for enforcing regulations. In this morning’s hearing, we will discuss the FTC’s efforts to promote competition and its role in spurring small business development.

Competition is a powerful catalyst for financial growth. This is particularly true for America’s entrepreneurs, who thrive in an open economy. Competition is the key that allows small businesses to unlock new markets and expand existing industries. It lowers prices and raises the bar for quality, largely because it forces other companies to step up to the plate and elevate their standards. At the end of the day, an entrenched business has little incentive to offer competitive values. Small firms, on the other hand, have every motivation to do so.

On top of lowering consumer costs, competition also promotes invention. Startups have historically led the lion’s share of industry innovation. From the tech boom of the mid 1990’s to the Green Energy revolution of today, entrepreneurs are the business world’s best innovators. They are always looking to meet emerging needs and offer fresher, better choices. In order to remain competitive, big brands are then forced to either innovate on their own, or otherwise increase the values. Either way, consumers enjoy more choices.

Competition does more than level the playing field. It stimulates the economy. This is particularly true for America’s small businesses, whose survival depends on access to an open marketplace. If monopolies are permitted to dominate entire industries, then they have little incentive to innovate or contribute to economic expansion. That is why it is so important that competition be protected for entrepreneurs. Without the opportunities that it affords, these small firms will not be able to do what they do best-- drive innovation, create jobs and spur financial growth.