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Remarks at Peterson Institute for International Economies

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AS PREPARED FOR DELIVERY

Thursday, January 21, 2010

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Deputy Secretary of Commerce Dennis F. Hightower
Remarks at Peterson Institute for International Economies
Washington, D.C.

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It is a pleasure to be here with Deputy U.S. Trade Representative Miriam Sapiro, Dr. Fred Bergsten and Dr. Sharon Freeman and all of you.

We are here to talk about charting a road ahead for economic recovery—and I cannot think of a better group to talk about this with than leaders of the small- and medium-sized businesses assembled here today.

Because you are the real engines of growth and dynamism in our economy.

Entrepreneurs create approximately three million jobs a year.

In fact, over the last three decades, startups—firms less than five years old—have accounted for nearly all increased employment in the American private sector.

But the contributions of entrepreneurs and other small-business run much deeper than that.

The willingness of entrepreneurs to mortgage their houses, work 100-hour weeks and throw caution to the wind in the pursuit of an idea is the lifeblood of American innovation and economic growth.

With this in mind, the Obama administration is making the promotion of entrepreneurship and private sector innovators one of the centerpieces of its economic recovery agenda.

And key measures have already been passed.

The Recovery Act passed last year had an important provision enabling the Small Business Administration to increase loan guarantees from 75 to 90 percent on their biggest loan program and also to waive a variety of borrower fees.

Since the signing of the Recovery Act, SBA loan volume is up 60 percent.

The President’s 2010 budget included a provision to reduce to zero the capital gains on investments in small or startup businesses. It also included a measure to make the research experimentation tax credit permanent.

These are significant steps, and at the Department of Commerce, we’re proud to be complementing and expanding upon these efforts.

Right now, we’ve set two particular priorities that will be a boon to America's small and medium-size businesses.

Number one is export promotion.

Exports are a growing and substantial part of the U.S. economy. In 2008, they accounted for 13 percent of our GDP, almost three times as high as it was in the 1950s.

Today, less than one percent of American companies export—a percentage significantly lower than that of all other developed countries.

And of the companies that do export, 58 percent export to only one market. Increasing this number, even by a small percentage, could have a big impact on the U.S. economy.

The Commerce Department has an array of tools to help businesses enter the global marketplace. this includes commercial Service officers operating in over 100 U.S. locations and 77 countries throughout the world who will actually find international partners and customers for American businesses.

In FY 2009, despite the global recession, our Commercial Service was able to increase the number of companies successfully assisted with nearly 5,600 companies reporting a success, a 3 percent increase from FY 2008. Of these firms, over 85 percent were small- and medium-sized enterprises.

Our continued focus on SMEs helped 832 firms export for the first time and 2,876 enter a new market, an increase of 95 percent and 31 percent respectfully from FY 2008.

And in the weeks ahead, you’re going to hear about some significant new measures at commerce to further expand our trade promotion efforts.

the second agenda item that should be of interest to all of you is the issue of technology commercialization.

We are working hard to make sure the basic and applied research that occurs in government-funded research labs and universities can more easily be accessed by entrepreneurs and other private sector innovators to create useful products and services in the marketplace.

These initiatives are being driven from the very top by Secretary Locke. And we’ve put even more firepower behind them with the recent creation of an office of innovation and entrepreneurship.

This office, along with the new National Advisory Council on Innovation and Entrepreneurship, will help drive policies across the administration that will help entrepreneurs translate new ideas, products and services into economic growth.

We’re very excited about this—and I'm very excited to hear from all of you about what else the Commerce Department and the Obama administration can do to make your companies more successful.

And now it is my great pleasure to introduce Dr. Sharon Freeman, who is founder and president of Lark-Horton Global Consulting; director of the Washington, D.C. Government’s International business Development Office at the D.C. Chamber of Commerce; the author of six books including Exporting, Importing and E-Commerce, and an advisor to the Secretary of Commerce and the U.S. Trade Representative on Small and Minority business

Dr. Freeman holds a Ph.D. in Applied Management and Decision Sciences from Walden University and a Master of Science and two undergraduate degrees from Carnegie-Mellon University.