In celebration of the 2016 Minority Enterprise Development Week, U.S. Secretary of Commerce Penny Pritzker today delivered a keynote address at the National Minority Supplier Development Council (NMSDC) Conference in Chicago. Speaking to more than 2,000 CEOs and minority business leaders, Secretary Pritzker highlighted the remarkable growth of minority-owned enterprises that had taken place during the Obama administration and reaffirmed the Commerce Department’s commitment to helping minority businesses overcome the challenges they still face in today’s economy.
Pointing to the lack of diversity in America’s fast-growing, high-tech fields as a threat to our nation’s long-term competitiveness, Secretary Pritzker discussed how the Minority Business Development Agency’s newly-launched Innovation Inclusion Initiative (I-3) will increase opportunities for minority entrepreneurs and businesses to compete in cutting edge industries like the Internet of Things and advanced manufacturing. Additionally, Secretary Pritzker emphasized how minority-owned enterprises, which are twice as likely to export their products as nonminority firms, are uniquely positioned to benefit with the enactment of Trans-Pacific Partnership.
Remarks as Prepared for Delivery
Good morning. It is a pleasure to be here with all of you. Alejandra, I want to thank you and your entire team at the Minority Business Development Agency for all that you have done over these past six years to promote entrepreneurship and inclusion in our economy. Let’s all give Alejandra a round of applause.
I would also like to recognize CEO Joset Wright-Lacy. Joset has been a true partner to the Commerce Department, from serving on our Minority Business Enterprise National Advisory Council to joining us at the world’s largest industrial trade show in Hannover, Germany. Thank you, Joset.
We are proud to once again hold Minority Enterprise Development Week in conjunction with your annual conference. And I am especially thrilled to celebrate MED Week 2016 with you right here in Chicago, the city I love and I call home. Am I the only Cubs’ fan here today?
It has been three years since I left my beloved hometown to serve my friend and a leader who we are all proud to call our President – especially in these times – Barack Obama. Serving as Commerce Secretary and advancing this Administration’s vision of economic opportunity for all Americans has been a great honor.
Think about how far we have come in recent years. In 2009, our economy was shedding over 800,000 jobs a month. Today, the private sector has created over 15 million new jobs. Unemployment has fallen to eight-year lows. And nine out of 10 Americans have health coverage.
In 2015, household incomes rose for the first time in nearly a decade. And last year, 3.5 million people were lifted out of poverty – well over half in minority communities. That is the largest one-year drop in poverty since the days of Lyndon Johnson’s “great society.” We owe much of this success to minority businesses. You were integral to moving our economy from recession to recovery to expansion.
In 2007, at the start of our economic downturn, we had 5.8 million minority-owned firms across the country. By the end of President Obama’s first term in 2012, that number grew to well over 8 million minority-owned companies open for business.
To put this growth in context, this 38 percent increase occurred at a time when the total number of firms nationwide grew by just 2 percent. Your businesses are also creating jobs four times faster than nonminority firms. Thirteen percent of minority employers are startups less than two years old – compared to just 8 percent of nonminority employers.
What does this data tell us? It tells us that right here in this room are America’s job creators; that diversity is one of our economy’s greatest strengths; and that minority communities are keeping our nation’s tradition of entrepreneurship and job creation alive.
Yet despite this progress, real challenges remain. Just 29 percent of companies in the United States are owned by Americans from minority communities. And minority businesses still generate less than a third of the revenue of nonminority firms. Put simply: the data is not only revealing how far we have come, but also how much further we have to go.
From Ferguson to Baltimore to Dallas to Charlotte, we have been reminded time and time again why we must build an inclusive economy. But of course, our need to extend opportunity to all is about far more than current events. It is about the future of our country.
The United States is projected to become a majority-minority nation in the next 30 to 40 years. Our need to break down the barriers that confront minority-owned businesses must be treated as an urgent economic imperative.
In addition to these profound demographic shifts, our country is undergoing enormous economic and technological change. Globalization, automation, and digitization are transforming the economic landscape. Now and into the future, some of the greatest opportunities in business are found in high-tech fields like advanced manufacturing, digital services, the Internet of Things, and artificial intelligence.
Yet today, just 10 percent of minority-owned firms compete in these innovative, high-growth industries. Historical barriers have limited opportunities for people of color in science, technology, engineering, math and other STEM fields. And according to the Kapor Center for Social Impact, today black and Latino-owned startups combined receive less than three percent of all venture capital funding.
Overcoming these disparities is essential to America’s economic future. As America grows more diverse, our long-term prosperity depends on the ability of your businesses to drive innovation at home and compete in markets around the world.
At the Commerce Department, our Minority Business Development Agency, or MBDA, is the federal government’s only office dedicated solely to helping minority-owned enterprises succeed. For years, MBDA has helped minority businesses access capital, compete for contracts, and export to new markets. Now, MBDA is intensifying our efforts to help more minority-owned firms compete in today’s high-tech, high-growth fields and access global markets.
Last month, the Commerce Department was proud to announce the Inclusive Innovation Initiative, or I-3. I-3 is a partnership between MBDA and our Federal Labs Consortium, a national network of research facilities that receives nearly $140 billion in federal funding per year. Many of today’s most popular technologies were conceived inside our innovative federal laboratories. Take GPS for example.
It was during the “space race” that scientists created the technology that is inside our phones today. For decades, companies have partnered with our federal research labs to turn new inventions into successful commercial products, from MRIs to smart sensors to Siri. Yet few minority firms have taken advantage of this incredible resource.
MBDA is changing that with I-3 by plugging more entrepreneurs and enterprises into this proven pipeline of innovation. Here in Chicago, our team will connect businesses in the energy field with Argonne National Lab, where scientists are developing longer lasting batteries. And in Atlanta, MBDA will notify health care companies about ways they can collaborate with researchers at the Centers for Disease Control and Prevention.
Our goal is to increase the transfer of federally-developed technologies to minority-owned enterprises. We want to see more of your businesses move innovative ideas out of our labs and into the marketplace. Of course, in today’s global economy, even companies with the most in-demand, cutting-edge products cannot limit their sales to the United States.
Your future growth depends on engaging the 95 percent of consumers who live beyond our borders. The good news is that minority businesses are twice as likely as nonminority firms to export their products and services abroad. They are also three times more likely to generate 100 percent of their revenues from exporting.
But too often, American companies lack equal access to foreign markets and confront significant barriers to entry. That is why the Trans-Pacific Partnership – a new high-standards trade agreement – is a strategic priority for President Obama and our entire Administration. TPP will break down trade barriers in the Asia Pacific region that disadvantage your companies.
This trade agreement eliminates 18,000 tariffs on American products and services from day one. For example, automotive goods face a 70 percent tariff in Vietnam. Machinery faces a 59 percent tariff in Malaysia. And information and communications technology faces tariffs as high as 35 percent across the region.
Of course, TPP does more than eliminate tariffs. It also strengthens intellectual property rights, reduces costly export delays, and limits barriers to digital trade. And by linking the U.S. to some of the fastest growing markets in the Asia Pacific, we will strengthen existing supply chains and build new ones across a region that generates nearly 40 percent of global GDP.
For many minority businesses, TPP will be a game-changer. Consider a firm like Concept II Cosmetics in Florida. In recent years, this small Hispanic-owned manufacturer has grown from 9 employees to 25. How did they get there? By exporting their products around the world. Concept II has expanded to 22 countries in just three years.
And the company sees its greatest potential for growth in the Asia Pacific region, where incomes are rising so quickly that the middle class is expected to grow from 570 million consumers today to 3.2 billion by 2030. If enacted, Concept II will have access to millions of potential new customers. But before we can unlock the benefits of TPP, we need this agreement passed by Congress.
The Trans-Pacific Partnership is a historic opportunity to shape the rules of trade in the 21st century to advance our economic strengths and our values. If we are going to cross the finish line on TPP, we need you to make your voices heard.
Let’s face it: the rhetoric around trade is more heated than ever. That’s why we need you to speak out and make the case for TPP to your families, your colleagues, your neighbors, and your local leaders. Tell them how TPP will break down barriers for your businesses abroad, connect your firms to global supply chains, and enable you to grow and reinvest in your communities.
The Department of Commerce is your partner – helping you compete in the fastest-growing industries and markets of the 21st century. America’s future is being shaped by two seismic shifts: a country that is growing more diverse and an economy that increasingly driven by technological innovation and trade.
Our long-term prosperity therefore hinges on the ability of your businesses to succeed.
When more Americans from our minority communities are able to take risks, start cutting-edge companies, reach customers around the world, and create jobs at home, we will have an economy that is more equitable; a country that is more competitive; and a people who are more prosperous.
With new efforts like I-3 and trade agreements like TPP, we are investing in your success. Thank you, and I wish you all a productive conference.