STATEMENT
of the
Honorable Nydia M. Velázquez, Chair
House Committee on Small Business
Full Committee Hearing: “Legislation to Reauthorize and Modernize SBA’s Entrepreneurial Development Programs”
Wednesday, May 6, 2009

Just last month, General Motors announced 8,000 new layoffs. Since then, companies like Clear Channel Broadcasting and Johnson & Johnson have followed suit. But while the corporate world may be scaling back, the entrepreneurial spirit is still alive and well. In fact, 400,000 small firms crop up every month. With the right resources and a little hard work, those startups will be the key to our economic recovery.

Starting and running a new enterprise is no small feat - even during times of prosperity. As any small business owner will tell you, the learning curve is steep. That’s where today’s legislation comes in. The Job Creation Through Entrepreneurship Act of 2009 will help small businesses access the resources they need to succeed.

With lending down and credit tightening, small firms are facing significant obstacles on all fronts, particularly when it comes to accessing capital. The proposal under consideration today will help them identify the best way to secure that funding. It will do this by offering training sessions and seminars on everything from repairing damaged credit to seeking out equity investment.

While the rest of the economy is declining, the federal marketplace is booming. Last year, it grew by 9%. The new stimulus is only going to add to that increase, and small businesses stand to gain a great deal. In terms of infrastructure contracts alone, they are expected to win $29.9 billion. Still, many of these firms have never competed in the federal marketplace, and need to learn its ins and outs. That takes training, and this bill will provide for it.
 
If entrepreneurs are to emerge stronger from the recession, then they must be able to retool their ventures. Enhanced technology resources will help them do that, and help them become more efficient. It will also rejuvenate underserved communities. This is critical, especially in the rural regions and inner cities that are suffering most. Through the use of online, satellite and video resources, small business owners everywhere can access training on a variety of subjects. And, in doing so, close the gap with their corporate and international competitors.

We are constantly hearing about the need to put people back to work. An important part of job creation is entrepreneurship. Through this legislation, we give people who might not otherwise pursue that line of work a chance to do so - especially those from non-traditional communities.

We know that the face of American business is changing. This bill recognizes that transformation with provisions for women and Native American business owners. It also provides a unique opportunity for veteran entrepreneurship. As our servicemen and women return from war, it is critical that they have a chance to start their own businesses.

But in order for ED to have its desired effect, it needs to be running at full capacity. SBA also should be smarter about how it manages these programs. The agency has suffered from chronic underfunding in the past, and it is critical that it make the most of its resources today.  That’s why this legislation includes conditions for program coordination. New requirements promote best practices, and ensure services are not duplicated.  They also contain tough new performance measurements for gauging program success. That way, we will know which initiatives are working, which need to be revaluated, and which should be scrapped altogether.

The Job Creation Through Entrepreneurship Act of 2009 is a bi-partisan product. It is the work of 7 different committee members - including 5 from the minority. I’d like to thank Chairman Shuler for his leadership in these efforts, and everyone else who contributed to the legislation. Strengthening ED programs will not only bolster small businesses, but will help get our economy moving again.