New Geography

Tag: small business

  • US House Gives Small Business the Huggem-Muggem

    “In public Congress hugs them, in private they mug them!” So said the late Milt Stewart, one of the architects of the Small Business Innovation Research (SBIR) Program in the 1980s and a renowned advocate for America’s small businesses.

    I first met Milt in 1992 and eagerly joined forces with him and others from business and government to generate more research opportunities for America’s small businesses – then and now, the most potent force for innovation and job creation on the planet.

    Unfortunately, small business continues to get what Fred Patterson, echoing Milt Stewart, calls the “Huggem-Muggem”: lots of lip service but very little productive legislative action that facilitates their creation of jobs.

    Case in point is the current plight of the SBIR program, which has received considerable bi-partisan support in the Congress for more than 25 years. The Senate of the 111th Congress wanted to reauthorize the SBIR but their counterparts in the House leadership played the old “Huggem-Muggem” game.

    The outgoing Chairman of the House Small Business Committee, Nydia Velazquez (D-NY), blocked all efforts to openly debate many Small Business Administration (SBA) initiatives, including the SBIR Program, before her committee. The incoming committee chair, Sam Graves (R-MO), has previously aligned with her to thwart SBIR reauthorization. Their opposition to reauthorization appears to center on the fact that companies which are majority-owned by venture capital firms are now ineligible to apply for SBIR funds.

    The National Small Business Association puts the facts on the line. “Despite the remarkable achievements of SBIR, federal R&D funding is still skewed against small businesses. Today, small R&D companies employ 38 percent of all scientists and engineers in America. This is more than all U.S. universities and more than all large businesses. Furthermore, these small companies produce five times as many patents per dollar as large companies and 20 times as many as universities—and more small-business innovations are commercialized. Yet small companies receive only 4.3 percent of the federal government’s R&D dollars. The SBIR program provides more than half of this amount.”

    If our country is serious about innovation, competitiveness and job creation it makes sense that we put our resources where they have the most impact. Instead, we are served up the same old tired “Huggem-Muggem” game by those who profess to be advocates for small business.

    I’ve said it before, and will say it again- instead of weakening the SBIR program we should be doubling, if not tripling, our country’s investment in the program. At a minimum a $5 billion SBIR program should be put in place. It will give us much more job growth than the Treasury bailouts of domestic banks and, as we now know, foreign banks too. The SBIR program represents both what America wants and needs in these times of economic stress: job growth driven by small business innovation.

    Delore Zimmerman is President of Praxis Strategy Group and publisher of newgeography.com

  • Supporting Small Business in NYC: The Harlem Metro Market Project

    The Harlem Community Development Corporation has come up with a rather unique plan to combat high real estate prices in the district. It proposes establishing an open-air market under the Metro North tracks spanning one mile, or 22 city blocks. This new market would accommodate about 900 vendors, helping to increase the now low number of local entrepreneurs and independent retail stores in Harlem.

    The market would not only attract vendors, but tourist traffic as well, which would help rejuvenate a neighborhood hampered by soaring commercial real estate costs. It costs anywhere from $125 to $225 per square foot for commercial space in Harlem’s prime locations, resulting in only 42 stores for every 10,000 residents. The Metro market project would ease pressure on small, independent retailers and allow potential entrepreneurs the chance to create viable businesses in the city.

    This need for such a project reflects the economic trends and challenges facing the larger New York urban area’s middle class. New York City has the nation’s highest cost of living, and like the rest of the nation, is still experiencing the effects of the recession. The middle class, including small business owners facing high rents, struggles to make the six-figure salaries needed to meet the city’s high cost of living.

    Harlem’s Metro market project, which would encourage an independent entrepreneurial spirit, embodies the required plan of action for New York City. The city needs to find inventive ways to deal with its economic reality in order to reverse the recession and revitalize its appeal to the energetic and the ambitious.

  • I Heart Des Moines

    Forbes Magazine just released its “Best Places for Business and Careers” list and it’s no surprise to me that Des Moines, Iowa just landed in the top spot. Nearly 5 years ago, I’d have said the same thing you may have just muttered. “Des Moines…that’s fly over country…who’d want to live and work THERE?” I fully appreciate your logic with our cold winters, humid summers, and ag-centric heritage. But weather and corn fields aside, the Des Moines metro, a circle consisting of about half a million people, has captured my heart and I’ve become its most passionate evangelist.

    After a lifetime of Southern California bustle, my wife wasn’t exactly thrilled about my desire to abandon our friends and family infrastructure. But ultimately she wanted me to have more than a view from the windshield of a Honda Civic and to be a stay-at-home mom for our kids. We began to see clearly that reaching goals for entrepreneurship, more family time, and more civic engagement were unattainable in our current location. We were ready to reclaim our time, live with less hassle, and stretch a bit.

    So in 2005, we executed geographic arbitrage landing in Clive, Iowa, a beautiful community on the West side of the Des Moines metro. Soon the memory of my 2.5 hour daily plunge into freeway hell was fading. Views of the beaches and mountains from the window of the 6:20AM flight to DFW became real life experiences on urban bike trails and fishing at the lake blocks from my house. A 20-minute drive from end-to-end, the Des Moines metro area defines easy living and 70 miles equals 60 minutes. (I’m still chronically early to my appointments.)

    During those first months here a local business blogger who’d been reading my copious posts on “Why Des Moines?” reached out to me. After coffee and a few introductions, my personal and business network began to flourish. It was hard to comprehend how quickly anyone who’s willing could reach top level contacts in business, associations, and in government. Before long I was shopping a business plan to investors and prominent business owners in town. I was even introduced to State House representatives who cared about my thoughts on what’s happening in their districts. (I went 33 years never meeting a Congressman in CA.) I realized that within a few phone calls I could reach top decision makers, corporate leaders, and legislators and they were willing to listen to me. My business createWOWmedia is growing rapidly now and I’m reaping the benefits of 2.5 years of head down execution and statewide relationship building. I had the time, the energy, and the start up capital through my CA home sale to stop dreaming and start doing. The Des Moines metro gave me that opportunity and I’m thankful for it.

    I’ve figured out that if you’re willing to endure a couple months spent largely indoors or bundled up that the trade-offs are magical and worth their weight in gold. I wouldn’t trade what I’ve found here for anything. The Des Moines metro and the state of Iowa as a whole offer so much…and ask so little in return. Des Moines is easy living defined.

    Am I worried about a massive influx of new Iowans pouring in from Western states based on this piece and Forbes’s recommendations? No chance. But if you do decide to take the plunge and reclaim your life from the concrete jungle, shoot me an email and I’d be happy to guide you. That’s what good neighbors and Iowans do.

    Doug Mitchell is a Southern California refugee who moved his family to Des Moines, Iowa to build a better life. Doug can be reached at doug@createWOWmedia.com or on twitter @doug_mitchell

  • No Bailout of Small Businesses

    CIT Group Inc. acknowledged today that “policy makers” turned down their request for aid. It’s always sad when a company fails and goes into bankruptcy – people lose their jobs, all the vendor companies that sell them products suffer from the loss of business, etc. But what makes this one especially sad is that CIT, according to Bloomberg News, “specializes in loans to smaller firms, counting 1 million enterprises, including 300,000 retailers, among its customers.”

    This news comes on the heels of an appearance by former Secretary of Treasury Hank Paulson before the House Committee on Oversight and Government Reform. Summing up after the hearing, Chairman Edolphus Towns (D-NY) admitted that Congress turned over complete authority to Paulson in the Bailout last fall (Troubled Assets Relief Program, TARP): “with no accountability, no checks and balances.” The result is “seemingly arbitrary decision-making.”

    Representatives at the hearing repeatedly accused Paulson of deceiving Congress by telling them (and everyone else) that the bailout money would be used to help homeowners. In the end, it was as if the previous administration pillaged the U. S. Treasury on their way out of town.

    In the third of a series of hearings designed around the Bank of America merger with Merrill Lynch, Paulson told the Committee that he had the authority to remove Ken Lewis as head of the bank if he didn’t go through with the merger.

    Rep. Jim Jordan (R-OH) said there was “a pattern of deception.” He asked specifically, when did Paulson know that he was going to give the money to the banks – which he did on October 13 – after telling Congress on October 3 that he was going to use it to buy up bad mortgages? Paulson’s response was that he believed Congress knew they were giving him flexibility to do whatever he wanted – so he did.

    The question now is this: did Paulson pick and choose among his friends to decide who got a bailout? Special Inspector General Neil Barofsky will report to the House Oversight Committee next week with the release of his quarterly report to Congress on the use of TARP funds. Recall that Barofsky’s office is the only one with the authority to initiate criminal prosecutions. Maybe Paulson is still on his list.