Good morning! Thank you for the kind introduction.
It is my honor and privilege to be here with you today at this first quarterly Pillar Breakfast of the New Year! Miami Beach has always been one of my favorite locations.
While I and so many others love the beautiful beaches, restaurants and shopping, those of you assembled here who are business owners, politicians, and others who are heavily invested in sustaining the local economy know that – Miami Beach is much more than just a great destination, it is also a vital gateway.
That critical gateway to the U.S. from international communities is an essential part of the South Florida regional economy.
While we are all aware of the U.S. economic challenges, there are also great things happening right here and there is even more to come as regional businesses begin to expand and think globally and branch out into new high demand areas.With that in mind, I want to share information with you about some of the Administration’s initiatives as well as the work that we are involved in at the Minority Business Development Agency.
But first, let me extend to you my greetings on behalf of President Barack Obama, Secretary of Commerce Gary Locke, and the Minority Business Development Agency in Washington, DC. It is indeed a pleasure to be here among the brain trust that I see in this room. The fact that you are identified as Pillar Trustees means that you are among the leaders in your industry who are helping to begin to turn the economic tides. I acknowledge each and every one of you for creating successful businesses and for your contributions to the economic development of South Florida and the nation.
I would also like to acknowledge the leadership of the Miami Beach Chamber of Commerce ---- Jason Loeb, Chairman of the Board of Governors, Jerry Libbon, Chamber President & CEO, Ana Cecilia Velasco, Chief Operating Officer, the entire chamber team and the various chamber board members. Since 1921, the Miami Beach Chamber of Commerce has steadfastly ridden the economic waves – through boom and bust – to develop and support what some like to fondly call “America’s Rivera” – with more than 7 million tourists and $1.6 billion dollars in food, beverage and hotel spending. Today the Chamber’s role is more essential than ever in providing networking opportunities and business development for a new economy.
I want to share with you this morning, some exciting opportunities for Miami businesses with the federal government as well as the Administration’s charge to strengthen America’s businesses by thinking outside of the box. Each of you are strategically poised to move your businesses and the local and national economy to another level through three strategic approaches:
- The first is being even more inclusive – understanding that a diverse workforce, diverse strategic partners and alliances open new doors and untapped markets.
- The second is diversifying your business or targeting high-growth areas – In order to keep America competitive we have to begin to target industries that will create jobs and opportunities where the demands are.
- And the third is thinking globally --- It is thinking that goes beyond borders and makes exporting a part of your business model.
And as you reshape and reinvent your businesses, the Obama Administration, the U.S. Department of Commerce, and MBDA are all here to help.
Let me tell you a little about the agency that I represent.
The Minority Business Development Agency was created as an Executive Order, 41 years ago, and has reached hundreds of thousands of minority-owned businesses throughout that storied history. Though our creation was a result of important legislation that came out of the Civil Rights Movement, today our work is embedded in supporting Minority Business Enterprises which play a major role in our economy.
MBDA, which is a bureau of the U.S. Department of Commerce, serves minority entrepreneurs across the country and helps minority-owned firms create jobs, impact local economies and compete successfully in domestic and global marketplaces. The Minority Business Development Agency works with other federal, state and local government agencies to identify contracting opportunities and works with strategic partners to identify private sector contracting opportunities.
The 46 MBDA business centers are located throughout the country and offer consulting services, contract and financing opportunities, bonding and certification, business-to-business alliances, and executive training.
Why do minority businesses matter in the U.S. economic plan for recovery?
Minority firms have been an engine of job growth for the U.S. economy in recent years, outpacing growth within the general business community for most of the last decade. The number of people employed at minority-owned businesses jumped 27 percent – from 4.7 million to 5.9 million – between 2002 and 2007. Job growth for non-minority-owned firms was less than 1 percent during that same time. During those five years, the number of minority-owned firms in the U.S. grew 46 percent, to a total of 5.8 million. Meanwhile, the number of firms in the overall economy expanded at less than half that rate.
In terms of dollars, the revenue of minority-owned businesses is also growing much faster than that of non-minority-owned businesses. During that same period between 2002 and 2007, minority-owned firms’ revenue jumped 56 percent to $1 trillion annually. At non-minority firms, receipts were up just 21 percent, although average gross receipts for non-minority-owned firms remain much larger.
As minority owned firms are showing themselves as viable participants in U.S. economic recovery, strategic partnerships will also strengthen majority and non-minority firms in going after larger contracts, employing a greater number of people, and impacting local and national communities on a greater scale.
When we think of the new economy and what it will take to bring America all of the way back as a world leader, inclusion is a significant key to successful business models for the 21st century. It is also critical to our nation because of the tremendous economic opportunity that the minority business community offers in job creation.
President Obama and Commerce Secretary Locke are embracing and promoting the concept of increased diversity in the American business landscape. The Administration, MBDA, and the U.S. Department of Commerce recognize that entrepreneurs are a key source for new technologies, innovative ideas, new forms of efficiency and hope for the nation.
Last year, on September 27th, President Obama signed into law the Small Business Jobs Act, which is the most significant piece of small business legislation in over a decade. The new law extends the SBA enhanced loan provisions while offering billions more in lending support, tax cuts, and other opportunities for entrepreneurs and small businesses. The new law promotes small business exporting, building on the President’s National Export Initiative. The law turns the Export Express pilot loan program into a permanent program with 90 percent guarantees for loans up to $350,000 and 75 percent for loans between $350,000 and $500,000. The law provides $90 million in competitive grants over the next three years for states to help small business owners with exporting.
Understanding the importance of the travel and tourism industry, especially in places like Miami Beach, the previous Congress proposed legislation to establish a competitive grant program to promote domestic regional tourism growth and new domestic tourism market creation. Approximately 8.3 million domestic jobs depend on the travel and tourism industry. It also accounts for 2.6 percent of the nation’s gross domestic product, nearly 4 times that of the automotive industry.
The new i6 Challenge is another exciting opportunity. The Department of Commerce’s Office of Innovation and Entrepreneurship and Economic Development Administration has announced a $12 million innovation competition, in partnership with the National Institutes of Health and the National Science Foundation. The i6 Challenge identifies and provides support for the nation’s best ideas for technology commercialization and entrepreneurship in six different regions of the country. Up to $1 million dollars will be awarded to six winning teams with the most innovative ideas to drive technology commercialization and entrepreneurship in their regions. NIH and NSF will award a total of up to $6 million in additional funding to their Small Business Innovation Research (SBIR) grantees associated with winning teams.
This program is already having an impact. In the Philadelphia Region, it has included a partnership between Innovation Works, Inc. and Carnegie Mellon University, which will create the “Agile Innovation System,” to accelerate the commercialization of technologies being developed within the region’s universities and small businesses.
In the Pacific Northwest, Seattle Region, The Oregon Translational Research & Drug Development Institute, the Oregon Nanoscience & Microtechnologies Institute, and the Oregon Built Environment & Sustainable Techologies Center are joining forces to create the first comprehensive, innovation infrastructure – the Oregon Innovation Cluster.
This will ensure that good ideas are funded and commercialized by qualified entrepreneurs.
In addition, Secretary Locke has established a National Advisory Council on Innovation and Entrepreneurship made up of leading American innovators and entrepreneurs to help federal government formulate policies that make it easier to move ideas from labs to the marketplace. In addition to building a more inclusive workforce, moving your business forward also means identifying and tapping into some of the fastest growing and high-demand industries.
Innovation always has and always will be America’s global competitive advantage. Our ability to create products and services that help people around the world live more productive lives was a big reason why the 20th century was the American century. Innovation is how we built the strongest middle class the world had ever seen. And it’s a big part of how we will rebuild the American middle class here in the 21st century.
Much of that begins with research and development, and emerging sectors like 21st century infrastructure and manufacturing, clean energy and biotechnology. Those nations who lead in science and technology are in the position to ensure that their citizens have the best opportunities to realize their full potential.
Opportunities for the U.S. to solidify its position as a global leader lie in high growth areas that will create thousands of new jobs in exciting industries such as Green Technology – Alternative Energy and Healthcare IT.
Clean energy technologies, biomedical research, and improvements in healthcare information technology – are priority areas for companies to pursue with diverse workforces, strategic partners and strategic alliances.
There are minority firms ready and able to partner and to function strategically.
For example, an MBDA client, Argent Associates, Inc., has redefined its product offerings from logistical and supply chain experiences to environmental offerings – mainly providing green products that neutralize hazardous materials. This firm has also moved into recycling and refurbishment.
This is an example of a company that has diversified in order to fill a growing demand.
To broaden the scope of business opportunity, MBDA has been involved in assisting minority-owned businesses to take their products and services out of the country as exporters. Minority businesses exported to 41 countries on six continents between 1992 and 2009.
Right here in the Miami area, numerous minority-owned firms are exporting including electrical supply companies --- Mercedes Electric Supply, Inc. and Kilowatts Electric Supply Corporation. These companies are exporting to places such as Venezuela, Colombia, Belize, Guatemala, the Bahamas, Trinidad and Tobago, Jamaica, St. Kitts, Cayman Islands, and Nevis, West Indies. From this prime location here in Miami Beach, this undeniable gateway to international communities, diverse populations and a diverse workforce – exporting is an essential part of the economic equation. Yet only 1 percent of U.S. companies export products at all, and of those that do, 58 percent export to only one country – most frequently Canada or Mexico.
The expansion of exports would mean 2 million new jobs. Ninety-five percent of the world’s consumers and fastest growing markets are outside of our borders. The President’s National Export Initiative aims to double export in five years. Through the National Export Initiative, the Department of Commerce will educate U.S. companies about export opportunities, offer access to credit through Export-Import Bank financing programs, and remove trade barriers by enforcing our trade laws to level the playing field for American companies.
The Commerce Department offers annual trade missions, including an upcoming high technology business development mission to India, as well as other planned trade missions this year to Jordan and Israel, Nigeria, Egypt and Morocco, Mexico, Canada, Kazakhstan and Turkey. Commerce trade missions offer a cost-effective tool for helping U.S. companies learn first-hand about global markets through briefings, site visits, and one-on-one matchmaking appointments. More information about Commerce trade missions can be found on our website at www.mbda.gov or the Department of Commerce’s site at www.commerce.gov.
We fully expect that entrepreneurs will lead the American business community’s charge, as the President’s National Export Initiative has challenged them to do. This is indeed a great time for entrepreneurship! America needs small businesses to be successful. What began as your dream and entrepreneurial vision is rapidly becoming the backbone of our national economy.
The Administration’s American Recovery Act projects are underway, and the President has outlined steps to expand opportunities for small firms to conduct business with the federal government.
The Federal Government is the world’s largest purchaser of goods and services, with purchases totaling - a Half Trillion Dollars per year. The Administration has committed to creating parity – making it a more even playing field. And with that in mind, the President has created an Interagency Task Force for federal contracts for small businesses. Agencies will be required to take a number of steps to improve transparency in federal contracting data and expand outreach to small businesses, with a particular focus on small businesses owned by women, minorities, socially and economically disadvantaged individuals and service-disabled veterans. Overall, the goal is to make sure that 23 percent of contracts or more go to small businesses.
Yes, there are challenges as the country climbs out of a recession, and businesses struggle with harsh economic realities. For minority firms, one reality is the fact that just 800,000 of the nearly 6 million minority firms in existence have more than one employee. And the annual revenue for the average minority-owned firm is about $300,000 less than that of a non-minority-owned firm.
The Administration wants to close that gap. Closing the entrepreneurial revenue gap between minority- and non-minority-owned businesses based on the share of the adult minority population would add $2.5 trillion to our nation’s economic output, creating 11.8 million more American jobs.
We also know that increasing revenue for minority firms not only facilitates job creation, but it also unleashes innovation of an economic sector that has long been undervalued. We have what we need to make change happen. Corporate America can strengthen its efforts toward diversity in its global supply chain. Minority business owners can do a better job of embracing opportunities for alliances, mergers and strategic partnerships.
Six of the 10 largest Hispanic and Black-owned businesses in the United States were created through mergers and acquisitions, joint ventures and strategic partnerships. Non-minority firms can make inclusion and diversity an integral part of the business model.Change requires everyone thinking outside of the norm to attain sustained profits.
We also want you to know that you are not alone on this journey. The MBDA business centers are available to help minority businesses around the country gain access to private capital, contracts and assistance in entering growing foreign markets. The Department of Commerce and the Small Business Administration offers numerous programs to help small businesses grow and expand beyond our borders. Since our nation was founded, the United States has always been a beacon of economic opportunity and limitless possibility.
When I look out into the audience, I also see unlimited talent, creativity, and possibilities to participate further in strengthening the Miami Beach economy. America is built on the idea that anyone, of any race, with a good idea, product or service and a solid business model – can and should pursue their dream. As we emerge from a historic recession, we need all businesses working on full throttle in doing their part in rebuilding America to its previous state as a world economic leader through job creation, innovation, and global expansion. In order for America to truly compete on the global stage, there must also be recognition that the world is diverse – and there must be diverse people sitting at the negotiating table. The tools are available to help you to grow, to develop, and to win!
Thank you for this opportunity!