AS PREPARED FOR DELIVERY
Friday, August 27, 2010
CONTACT OFFICE OF PUBLIC AFFAIRS
Thank you, David, for the kind words and for your terrific leadership of the Minority Business Development Agency.
On behalf of President Obama and all of us at the Department of Commerce, I join David in welcoming everyone to the 2010 MED Week.
And let me take a moment here to thank the many sponsors of MED Week.
It’s great to be here this morning with so many of the entrepreneurs and small business owners who are such powerful catalysts for the American economy.
My dad was a minority business owner – a small grocery store in Seattle, Washington. He spent seven days a week in that grocery store. And I spent a lot of those days by his side.
I know the time, the effort, and dedication it takes to run and grow a business.
So you all have my admiration and deep appreciation for what you do for your communities and our country.
Most minority businesses, of course are small businesses – which create two out of every three new American jobs in the private sector.
That is why, since day one of the Obama administration, we have put the empowerment of small businesses and entrepreneurs at the top of our economic recovery agenda.
Consider the fact that in the first year and a half of this administration:
Taxes for America’s small companies have been cut eight times;
New rules have been passed that allow small businesses to write off more of their investments in new equipment; and waive the fees on their SBA loans; and
As part of the health reform package, some four million small business owners recently received a postcard in their mailboxes telling them that they could be eligible for a health care tax credit that’s worth perhaps tens of thousands of dollars to each small business.
These measures, along with others the President has taken to pass the Recovery Act and to stabilize the financial and housing markets have had a tangible and positive impact on businesses, and on the American economy.
It’s important to remember that at the outset of 2009 – when President Obama took office – the U.S. economy was shrinking at a rate of 6.8 percent – a free fall that risked turning a recession into a depression.
But the American economy has now been growing for four straight quarters.
And our economy has created private-sector jobs for six months in a row, after 22 months straight of job losses.
I know these statistics are cold comfort to the many Americans still struggling to get a foothold in this economy, and it is not recovering as fast and as strong as we would like.
But you can’t reverse overnight the devastation of a national recession that saw eight million job losses that started in late 2007.
We’ve got to keep chipping away at this unemployment challenge from every direction.
And, as President Obama said, more needs to be done to help the many small companies that are still having a hard time getting back on their feet.
That’s why the President is urging Congress to swiftly approve a set of tax breaks and lending incentives designed to spur hiring and growth at small businesses.
If the bill becomes law, small businesses and start ups will see the positive benefits right away.
It eliminates capital gains taxes for key investments in small firms, increases the deductions small businesses can take for new equipment and other expenses, and makes more credit available from community banks.
Of course, these measures I've just discussed are broadly targeted at the small business community. But this administration recognizes that minority businesses have unique strengths that must be built on, and unique challenges that must be overcome.
Many minority businesses are faced with obstacles like:
Lack of credit access;
Lack of skilled and educated employeres in the communities where they operate;
Limited access to new markets due in large part to the challenges in obtaining capital and navigating contract law;
And a lack of the personal and professional networks that are so important to providing financing and guidance when a business is getting off the ground.
As a result, the state of minority business in America is a decidedly mixed bag.
On the one hand, minority businesses in America account for $1 trillion in gross receipts and support almost six million jobs. That is a significant source of economic growth in America.
And yet, the average minority owned firm is still much smaller and has a lower payroll than other businesses, and quite frankly, has a lower chance of success.
That is why the Obama administration and the Commerce Department are taking aggressive steps to empower minority businesses in America.
There are two ways we are going about it.
Number one is to improve the physical infrastructure and overall economic environment where minority businesses operate.
A great example is the Commerce Department leading the administration's $7 billion effort to expand high-speed Internet access to unserved and underserved parts of the country.
Right now, 36 six percent of Americans have little or no high-speed Internet access -- which means we are effectively preventing one third of our citizens from fully participating in the 21st century global economy.
It's hard to attract businesses to area where employees and customers don't have access to high-speed Internet in their homes.
It's hard to grow your business when you don't have instant access to the global marketplace at your fingertips.
These Commerce Department grants are going to help integrate minority communities and businesses into the national and international marketplace.
Just last week, I announced a package of 66 grants across America that will help lay down 25,000 miles of new fiber-optic network, and could potentially bring high-speed Internet access to as many as 19 million households.
And as the Commerce Department works to make these structural improvements for minority businesses, we’re also directly lending a hand.
I'm sure that David Hinson will be talking about how our Minority Business Development Agency is promoting a new model of growth for minority-owned firms.
The idea is to move away from a focus on organically growing one contract at a time, to growth through joint ventures, strategic partnerships, mergers and acquisitions.
This is important not just for minority businesses, but for the communities where many of you operate.
You can’t revitalize a town or city that has just lost 3,000 jobs due to a factory closing by having companies pursue incremental growth.
We’ve got to get more minority entrepreneurs building innovative high growth companies that can compete in the global economy and provide the type of family wage jobs that provide security and dignity.
And one of the best ways for minority businesses to achieve rapid growth is to tap into international markets, where 95 percent of the world's consumers reside.
That's going to be a lot easier thanks to President Obama's National Export Initiative (or NEI), which aims to double U.S. exports over the next five years, and support two million new American jobs.
This initiative was designed with one overriding goal in mind: to get people back to work in jobs that provide security, dignity and a sense of hope for the future.
Under the National Export Initiative, there is going to be more credit available for exporters, more government efforts to find more foreign buyers of American-made goods and services, and a sharper focus on knocking down the barriers that prevent U.S. companies from getting free and open access to foreign markets.
There is a whole lot of untapped potential out there.
Today, less than one percent of America’s 30 million companies export – a percentage that is also significantly lower than all other developed countries. And of U.S. companies that do export, 58 percent export to only one country.
Imagine if we could just get the company that’s selling products to Canada to grow into Mexico, or the company providing services in France to move into neighboring Spain. Do that enough times and America is going to find its export goals that are achievable.
CIeNet Technologies International, one of the minority companies being recognized at tonight’s award ceremony has shown what can be accomplished by tapping into world markets.
Based in Oakbrook, Illinois, CIeNET is a leading technical service provider in the area of globally sourced consulting, software development, testing and systems integration.
CIeNET has positioned itself as a premier global delivery partner that works with Fortune 1000 companies across Asia, Europe, the Middle East and North America.
In 2009, CIeNET had approximately $34 million in revenues and employed 110 workers worldwide.
Minority businesses already export twice as much as the average business, as they often have existing cultural, family or business ties to foreign countries.
We want to build on that. One of the goals of the NEI is to increase the number of small, medium and minority-owned businesses exporting to more than one market by 50 percent over the next five years.
At the forefront of this effort will be the Commerce Department's International Trade Administration (or ITA) – which has a global network of trade specialists posted in 109 U.S. cities and at 128 U.S. embassies and consulates in 77 countries whose sole job is to find buyers for American companies.
Our commercial service professionals working out of these offices are great at what they do -- and I hope that many of you will take advantage of what they have to offer.
The Obama administration wants to empower minority businesses because it is self evidently a good thing for your employees, for your communities and for the entire American economy when you succeed.
But there is a deeper significance to your success.
When you were growing up and you read about minorities in the American history books, they were often notable for their efforts to expand civil rights.
People like Martin Luther King who worked to change the laws to end outright discrimination in our schools, in our workplaces and in the voting booth; and Caesar Chavez who fought for the rights of workers.
We learned about the people who broke the glass ceiling, like Shirley Chisholm becoming the first black woman elected to Congress or like Dalip Singh Saund, who became the first Asian American member of Congress.
These people are always going to have a special place.
But I hope that forty years from now, Americans will regard minority entrepreneurs and business owners -- maybe some of them sitting in this room today – with similar reverence as the civil rights leaders of the past.
Because economic empowerment is a final step in fulfilling the promise of the civil rights movement.
And all of you -- just by doing what you do every day -- are making an important contribution to that effort.
And now, I would like to invite all of you to join me for the ribbon cutting and the opening of the exhibit hall and the B2B Expo.