[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                           JOBS! JOBS! JOBS!

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON INNOVATION,
              ENTREPRENEURSHIP, AND WORKFORCE DEVELOPMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JUNE 30, 2021

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 117-023
             Available via the GPO Website: www.govinfo.gov
             
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
44-925                      WASHINGTON : 2021                     
          
-----------------------------------------------------------------------------------              
            
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                          JARED GOLDEN, Maine
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                         MARIE NEWMAN, Illinois
                       CAROLYN BOURDEAUX, Georgia
                         TROY CARTER, Louisiana
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
              BLAINE LUETKEMEYER, Missouri, Ranking Member
                         ROGER WILLIAMS, Texas
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                        CLAUDIA TENNEY, New York
                       ANDREW GARBARINO, New York
                         YOUNG KIM, California
                         BETH VAN DUYNE, Texas
                         BYRON DONALDS, Florida
                         MARIA SALAZAR, Florida
                      SCOTT FITZGERALD, Wisconsin

                 Melissa Jung, Majority Staff Director
            Ellen Harrington, Majority Deputy Staff Director
                     David Planning, Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Jason Crow..................................................     1
Hon. Young Kim...................................................     3

                               WITNESSES

Mr. John R. Dearie, President, Center for American 
  Entrepreneurship, Great Falls, VA..............................     5
Dr. J.D. LaRock, President and Chief Executive Officer, Network 
  for Teaching Entrepreneurship, New York, NY....................     7
Ms. Denyse Airheart, Business Pathways Director, Mi Casa Resource 
  Center, Denver, CO.............................................     8
Mr. Craig Etkin, President and Chief Executive Officer, 
  Intelligence360, Sugar Land, TX................................    10

                                APPENDIX

Prepared Statements:
    Mr. John R. Dearie, President, Center for American 
      Entrepreneurship, Great Falls, VA..........................    26
    Dr. J.D. LaRock, President and Chief Executive Officer, 
      Network for Teaching Entrepreneurship, New York, NY........    63
    Ms. Denyse Airheart, Business Pathways Director, Mi Casa 
      Resource Center, Denver, CO................................    69
    Mr. Craig Etkin, President and Chief Executive Officer, 
      Intelligence360, Sugar Land, TX............................    70
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Job Creators Network (JCN)...................................    71
    Statement of Lamell McMorris.................................    73

 
                           JOBS! JOBS! JOBS!

                              ----------                              


                        WEDNESDAY, JUNE 30, 2021

              House of Representatives,    
               Committee on Small Business,
                        Subcommittee on Innovation,
               Entrepreneurship, and Workforce Development,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360, Rayburn House Office Building and via Zoom, Hon. 
Jason Crow [chairman of the Subcommittee] presiding.
    Present: Representatives Crow, Davids, Phillips, Newman, 
Bourdeaux, Houlahan, Garbarino, and Young Kim.
    Chairman CROW. Without objection, the Chair is authorized 
to declare a recess at any time.
    Let me begin by saying that standing House and Committee 
rules and practice will continue to apply during hybrid 
proceedings. All members are reminded they are expected to 
adhere to these standing rules, including decorum.
    House regulations require members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, please remember to remain muted until you are 
recognized to minimize background noise. If you have to 
participate in another proceeding, please exit this one and log 
back in later.
    In the event a member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available member of the same party and I 
will recognize that member at the next appropriate time slot 
provided they have returned to the proceeding.
    For those members and staff physically present in the 
Committee room today we will continue to follow the most recent 
OAP guidance. Masks are no longer required in our meeting space 
for members and staff who have been fully vaccinated. All 
members and staff who have not been fully vaccinated are still 
required to wear masks and socially distance. I sincerely hope 
we do all of our parts to protect each other and our staff.
    The COVID-19 pandemic inflicted a once in a lifetime 
economic shock on our Nation. The small businesses that make up 
the foundation of our economy were particular hard hit. Despite 
government efforts, nearly 200,000 business that closed their 
doors during the pandemic may never open. These enterprises 
were more than just storefronts, they were entrepreneurs' 
livelihoods, they were job creators, and pillars of their 
communities.
    As we work towards a full recovery from the pandemic we 
must fill the void these closures created. Unfortunately, we 
are amid a decades-long decline in entrepreneurship rates 
across the country. In 1982, new firms constituted 38 percent 
of all businesses, but that fell to only 29 percent in 2018. In 
recent years, the rate at which firms were exiting the market 
outpaced the rate at which firms entered the market.
    This decline in entrepreneurship stems from a variety of 
different factors. Economic crisis like the Great Recession 
decrease aggregate demand and create a tightened lending 
environment, hurting business startups. High amounts of student 
loan debt, fewer employment opportunities, the increasing 
consolidation of businesses have led to slow entrepreneurship 
rates among millennials.
    Millennials are on track to be the least entrepreneurial 
generation in history with startup rates well below baby boomer 
and Generation X counterparts. Simply put, we are staring down 
an entrepreneurship crisis in the country that has the 
potential to significantly delay our recovery.
    Moreover, this decline in business startups also can lower 
productivity, decrease the creation of new technologies, and 
slow the overall rate of job growth. I think we can all agree 
that this scenario of economic stagnation is not acceptable.
    Instead, we need our economy operating at maximum strength 
and Congress should consider how we can help reverse the 
decline in entrepreneurship. This will mean examining existing 
programs and considering new initiatives to produce an 
ecosystem that is more favorable to entrepreneurs.
    One such proposal is my bipartisan bill called the Next 
Generation Entrepreneurship Corps Act, or NextGen. NextGen 
seeks to accomplish two main objectives: entrepreneurship 
inclusivity and increased entrepreneurship in distressed 
regions. The program uses a tried-and-true model based on 
programs with a track record of positive impacts, like Teach 
for America and the Peace Corps. The bill would create a 
national business proposal competition that would select 
fellows annually to start and run businesses in their 
communities. The program would reward NextGen fellows with 
$120,000, 2-year stipend for living and startup expenses as 
well as health benefits. Fellows would then have access to 
various resources to help them start and grow their businesses.
    In addition, the NextGen bill would provide fellows with 
access to advice and mentorship through SBA resource partners 
as well as valuable networking opportunities. The program would 
also give the fellows assistance breaking into the world of 
Federal contracting.
    But most importantly, NextGen would allow underserved 
entrepreneurs to obtain the capital traditional financial 
institutions so often denied them. As part of the program 
NextGen fellows would have access to SBA-backed lenders to 
receive access to credit.
    Lastly, the program would establish a fund to encourage 
private investors by providing leverage to those who make an 
equity investment in a corps member's business.
    I hope that today's hearing allows us to examine new ideas, 
like the Next Generation Entrepreneurship Corps Act and others. 
By revitalizing American entrepreneurship we can transform our 
economy to be more productive, inclusive, and prosperous.
    I would now like to yield to the Ranking Member, Mrs. Young 
Kim, for her opening statement.
    Mrs. YOUNG KIM. Thank you, Chairman Crow, and good morning 
to everyone who is joining us in the room and also virtually. I 
would like to welcome our witnesses, too.
    Today we turn our attention to a topic that is paramount: 
small businesses, jobs, and whether the current environment can 
help the Nation and its millions of small businesses recover 
from the COVID-19 pandemic. In May, the national unemployment 
rate was a dismal high point 8 percent, which is virtually 
unchanged from April and still far higher than before the 
pandemic when it was a low 3.5 percent. In my home state of 
California, the May unemployment rate was a stunning 7.9 
percent. In my congressional district, San Bernadino County 
registered 7.3 percent unemployment and Orange County 5.9 
percent.
    Small businesses are still suffering. They are doing their 
best to regain footing after the COVID-19 pandemic, but they 
are facing dismal national employment numbers, increasing 
inflation, labor shortages, and highest costs for their 
materials. The small business job situation remains extremely 
challenging. Entrepreneurs are offering higher wages, cash 
bonuses, or other incentives are still unable to attract 
workers. In May, almost half of the small business owners 
surveyed by NFIB, 48 percent, said they are unable to find 
workers to fill jobs.
    Moreover, they face a very uncertain future with higher 
inflation, more regulations, increasing mandates, skyrocketing 
taxes, and unprecedented job vacancies threatening their 
recovery. Small businesses are the kindling that light up the 
American economy, so when they struggle, so does our Nation.
    According to the Federal Reserve's May 2021 Beige Book, 
businesses, and particularly small businesses, are continuing 
to cope with a very difficult economic environment. The 
negative impact of supply chain and production disruptions, 
widespread shortages of materials and labor, and delivery 
delays make it challenging to get products to consumers. Just 
this month the Port of Los Angeles said ships wait on average 
about 5 days to get in, adding to the cost of doing businesses 
for entrepreneurs. In normal times those ships don't have to 
wait at all. Small firms are plagued by consistently rising 
costs and more expensive goods used to make their products.
    So, with a generous enhanced Federal unemployment payments, 
employment has clearly not show robust numbers and businesses 
still can't fill open jobs. Although some rates are ending the 
enhanced unemployment payments, the jobs outlook remains 
uncertain.
    Small businesses comprise 95 percent of U.S. companies and 
they represent half of our Nation's workforce and they are 
major drivers of new job growth, creating 64 percent of the net 
new jobs. At a time when these firms are working tirelessly to 
get back on their feet, the new administration is threatening 
them with repealing the tax benefits of the Tax Cuts and Jobs 
Act and other tax increases, and proposing more regulations and 
red tape. Exactly the wrong environment for our Nation's best 
job creators.
    A recent Tax Foundation analysis found the combined effects 
of tax changes and spending in President Biden's American Jobs 
Plan would reduce the U.S. goods domestic product in the long 
run and result in 101,000 fewer U.S. jobs. Imagine that. A jobs 
plan that would result in fewer jobs. Think about it.
    Sadly, my home state of California is a case study on what 
high taxes and burdensome regulations can do to tamper job 
economic growth. So let us learn from the misguided policies 
enacted by Sacramento and let us not implement them at the 
national level.
    There is no doubt that the outlook for small businesses is 
more uncertainty. However, small businesses, entrepreneurs, and 
startups are some of the most innovative and resilient 
businesses in the Nation. They are often nimble, fast, and they 
can adapt to any situation. Unfortunately, the current 
environment is creating headwinds that prevent growth, 
expansion, and job creation.
    I look forward to hearing from our witnesses about the ways 
we can support pro-growth policies that drive our Nation's 
small businesses forward, not backwards.
    Thank you, Mr. Chairman. I yield back.
    Chairman CROW. Thank you, Mrs. Young Kim. The gentlewoman 
yields back.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness will have 5 minutes to provide a 
statement and each Committee member will have 5 minutes for 
questions. Please ensure that your microphone is one when you 
begin speaking and that you return to mute when finished. And 
with that, I would like to start by introducing our witnesses.
    Our first witness is Mr. John Dearie. Am I pronouncing that 
right, Mr. Dearie?
    Mr. DEARIE. Yes, Mr. Chairman.
    Chairman CROW. Mr. John Dearie, the founder and president 
of the Center for American Entrepreneurship. CAE is a 
nonpartisan research and policy organization whose mission is 
to improve the policy circumstances of American entrepreneurs 
and startups. Mr. Dearie is the former acting CEO of the 
Financial Services Forum and a former officer of the Federal 
Reserve Bank of New York. Welcome, Mr. Dearie.
    Our next witness is Dr. J.D. LaRock, the president and CEO 
of the Network for Teaching Entrepreneurship, a global 
nonprofit organization that provides high-quality 
entrepreneurship education to middle and high school students 
from under-resourced communities as well as programs for 
college students and adults. Previously, Dr. LaRock served as 
the president and CEO of the Massachusetts Commonwealth 
Corporation, where he chaired Governor Baker's Commission on 
Digital Innovation and Lifelong Learning. He also served as 
senior education advisor to Senator Ted Kennedy. Welcome, Dr. 
LaRock.
    Our third witness is Ms. Denyse Airheart, the director of 
Business Pathways and Mi Casa Resource Center. She oversees--
and that is in my district, so a special place in my heart from 
Mi Casa. She oversees the strategic advancement of the Business 
Pathways Department, which supports entrepreneurs through all 
stages of business development, helping them explore, launch, 
and grow their business through bilingual training, consulting, 
access to capital, and wholistic support services. She 
previously worked with the city of Maricopa, Arizona, as the 
director of economic development. Welcome, Ms. Airheart.
    I will now yield to the Ranking Member, Mrs. Young Kim, to 
introduce our final witness.
    Mrs. YOUNG KIM. Thank you, Mr. Chairman. Our final witness 
is Craig Etkin, president and CEO of Intelligence360 in Sugar 
Land, Texas. Intelligence360 is a business-to-business news 
aggregation company for top companies across the Nation. Mr. 
Etkin has almost 30 years of experience in information 
products, software, and technology. He manages the operations 
of Intelligence360, including product engineering, marketing, 
and business development.
    Prior to founding Intelligence360, Mr. Etkin was a member 
of the applications team at LexisNexis. And before that, he 
assisted in implementing new web capabilities for Dow Jones and 
Company. He also was instrumental in the rollout of the Wall 
Street Journal Interactive Edition, Barron's Online, and Dow 
Jones Interactive, and supported risk management solutions for 
Dun & Bradstreet.
    Welcome, Mr. Etkin. We look forward to your testimony and 
thank you for taking time out of your busy day running your 
small business to talk with us.
    I would also like to welcome the other witnesses and look 
forward to hearing your testimony.
    Chairman CROW. Thank you, Mrs. Young Kim. And welcome, Mr. 
Etkin, as well.
    Mr. Dearie, we will begin with you. You are now recognized 
for 5 minutes.

 STATEMENTS OF JOHN R. DEARIE, PRESIDENT, CENTER FOR AMERICAN 
 ENTREPRENEURSHIP; J.D. LAROCK, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, NETWORK FOR TEACHING ENTREPRENEURSHIP: DENYSE 
AIRHEART, BUSINESS PATHWAYS DIRECTOR, MI CASA RESOURCE CENTER; 
      CRAIG ETKIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
                        INTELLIGENCE360

                  STATEMENT OF JOHN R. DEARIE

    Mr. DEARIE. Thank you, Chairman Crow and Ranking Member 
Young Kim and Members of the Subcommittee. I appreciate the 
opportunity to be here today.
    Despite strong job creation in recent months, the focus of 
today's hearing remains urgently important. Even if the Bureau 
of Labor Statistics reports on Friday that a million new jobs 
have been created in June, as some economists have forecast, 
U.S. payrolls will still be down almost 7 million from pre-
COVID levels and as many as 10 million jobs short of what total 
employment would have been had the pandemic not happened, which 
is why I appreciate the opportunity to express CAE's strong 
support for the Next Generation Entrepreneurship Corps Act 
cosponsored by you, Mr. Chairman, and Troy Balderson in the 
House, along with Senators Chris Coons and Tim Scott in the 
Senate. The Act will encourage entrepreneurship and job 
creation in underserved areas across the country among diverse 
background entrepreneurs, who will receive startup capital, 
mentoring, and other support to help them start new businesses 
in distressed and low-income areas.
    As members of this Subcommittee are no doubt aware, 
research in recent years has shown that new businesses, or 
startups, are responsible for most net new job creation. 
Existing companies also create jobs, of course, but they also 
shed jobs, as many as a million a year in aggregate, as they 
become more efficient, incorporate capital and technology, and 
increasingly focus on what they do best. By stark contrast, new 
businesses create an average of about 3 million jobs each year.
    Startups also contribute to job creation more generally as 
a powerful driver of economic growth. Thanks to the work of 
American economist Robert Solow, who won the Nobel Prize for 
this insight, we know that economic growth is driven 
principally by gains and productivity driven by innovation. The 
great significance of Solow's work is that it not only 
identified the nature of economic growth, but also identified 
its principal source. That is because economists have long 
understood that innovation, particularly major or disruptive 
innovation, comes disproportionately from new businesses.
    Unfortunately, as scholars at the Kauffman Foundation, the 
Brookings Institution, and elsewhere have documented, 
entrepreneurship in America is struggling. Between 2009 and 
2019, the number of new businesses launched in America each 
year dropped by about 100,000 below the historical trend, 
meaning that over that decade the United States experienced a 
startup deficit of about a million fewer new firms over that 
period.
    Just as alarming as you mentioned, Chairman Crow, 
economists Bob Litan and Ian Hathaway have shown that rates of 
entrepreneurship, that is the fraction of all businesses in the 
United States that are new, has fallen near a four-decade low. 
To find out why, my colleagues and I get out of Washington on a 
regular basis and conduct roundtables with entrepreneurs in 
towns and cities across the country. Here is some of what they 
tell us.
    ``We have the jobs and we need to fill them in order to 
survive, but we can't find enough people who have the skills 
that we need.''
    ``Our immigration polices exacerbate that problem because 
they undermine our ability to attract and retain the world's 
best and most innovation talent.''
    ``Limited access to portable and affordable healthcare, a 
lack of affordable childcare, record student debt, and 
retirement savings uncertainty make entrepreneurship especially 
risky.''
    ``Access to sufficient startup capital is a constant 
challenge.''
    ``Regulatory burden, complexity, and uncertainty distracts 
entrepreneurs from focusing on their businesses, increasing the 
chances of mistakes or even failure.''
    And a number of aspects of our tax code ``are unsupportive 
of, or even hostile to, startups and their investors.''
    In conclusion, Chairman Crow, thriving entrepreneurship is 
the essential pathway to faster economic growth and job 
creation, and revitalizing American entrepreneurship requires 
changes in public policy. Fortunately, we have a very good 
sense of what needs to be done.
    Research conducted in recent years, together with input 
from entrepreneurs by way of roundtables of the sort that I 
mentioned, has produced a uniquely credible pro-
entrepreneurship agenda that, if enacted, would dramatically 
enhance the circumstances for new business formation, survival, 
and growth, which, as you pointed out, is so important, 
particularly in the post-COVID recovery period. That agenda is 
provided as the appendix to my written testimony.
    The Next Generation Entrepreneurship Corps Act is an 
important part of that agenda and is an excellent example of 
the kind of pro-entrepreneurship policy that America needs and 
deserves now more than ever. Thank you.
    Chairman CROW. Thank you, Mr. Dearie. Mr. LaRock, you are 
now recognized for 5 minutes.

                    STATEMENT OF J.D. LAROCK

    Mr. LAROCK. Thank you, Chairman Crow, Ranking Member Young 
Kim, and Members of the Committee. I am honored to share what 
we at the Network for Teaching Entrepreneurship, NFTE, have 
learned from providing entrepreneurship education in 14 
countries and 25 states, including 47,000 students this year.
    NFTE was founded on the belief that entrepreneurship 
education ignites passion and opens doors for student in under-
resourced communities. Our model features engaging curriculum 
taught mostly in public schools, buttressed by community 
mentors and volunteers. Our programs culminate in pitch 
competitions where students compete for seed funding to launch 
their businesses.
    We believe in inclusive capitalism and NFTE alumni have 
built brands, launched scores of businesses, and created 
thousands of jobs. Through the Next Generation Entrepreneurship 
Corps Act our Nation can provide future entrepreneurs even more 
equitable access to the productive tools of capitalism.
    To underscore the importance of the act I would like to 
discuss three issues. First, the barriers that entrepreneurs 
from underrepresented communities face are systemic and require 
robust intervention. Second, access to sustained mentorship 
bolsters entrepreneurship in ways that financial resources 
alone cannot. Finally, inclusive entrepreneurship is a vital 
component right now to our Nation's economic and social 
recovery from COVID-19.
    First, the barriers. According to the Department of 
Commerce our minority-owned businesses are more likely to be 
denied credit and even when they do receive loans, pay higher 
interest rates. CNBC recently reported that 80 percent of 
Black-owned businesses fail within the first 18 months. That is 
significantly more than the 30 percent of all small businesses 
that close by their second year.
    Our education and workforce development systems are 
starting to break down these barriers by addressing the first 
systemic inequality, access to learning about entrepreneurship 
itself. States like Florida and Texas, national philanthropies 
like American Student Assistance are now supporting widespread 
opportunities for entrepreneurship education as well as 
programs that start students early on a process of career 
discovery.
    We have seen the difference that this makes. NFTE alumna 
Mary Blackford first realized in high school that she could use 
entrepreneurship to make systemic change. Now, just down the 
road from us in Ward 7, she is building Market 7. This 7,000 
square-foot market will establish space for a community grocer 
and neighborhood micro entrepreneurs to discuss food access and 
create employment opportunities. Mary is the very example of 
the kind of emerging entrepreneur that the Next Generation 
Entrepreneurship Corps Act seeks to identify and support.
    Next, the value of mentorship. At NFTE corporate volunteers 
from companies like Citi, Santander, Intuit, PayPal, SAP, 
Microsoft, and Ernst & Young, EY, which recently launched the 
Entrepreneurs Access Network to help Black, Latino, and women 
entrepreneurs, all provide essential mentorship to our high 
school and middle school students. Similarly, the mentorship 
proposed in the Next Generation Entrepreneurship Corps Act will 
remove barriers and accelerate achievements.
    NFTE alumnus Andres Cardona was attending high school in 
Miami and considering dropping out to help his mother pay the 
bills, when a NFTE force helped him realize that he could start 
his own business while staying in school. A decade later, his 
Elite Basketball Academy is thriving with 20 employees and 
multiple sites, generating seven-figure revenue annually. 
Mentorship was an essential part of his journey and Andres 
still meets with his mentor regularly.
    Finally, the importance of entrepreneurship to post-COVID 
economic recovery. As you know, the pandemic vitiated minority-
owned businesses. CNBC reported that between February and April 
2020, Black-owned businesses declined by 41 percent compared to 
a 17 percent decline among White-owned businesses. Black-, 
Latino-, and Asian-owned businesses all experienced outsized 
closures and declines in cash balances, according to the Fed. 
Simply put, as we come out of COVID our economy cannot recover 
fully without entrepreneurship. And there is a legislative 
vehicle that provides a timely opportunity to help. The Next 
Generation Entrepreneurship Corps Act should be included in the 
American Jobs Plan to accelerate post-COVID recovery through 
entrepreneurship.
    In closing, entrepreneurship is inextricably woven into the 
American dream. When I think about what that means, I think 
about NFTE students at Nicolas Junior High School in Fullerton, 
California, getting encouragement from their EY mentors while 
they compete in one of our global entrepreneurship 
competitions.
    I think about Robert Refkin, CEO of Compass, the real 
estate company. He got his first exposure to entrepreneurship 
through a NFTE summer camp. Compass recently made its IPO and 
raised 450 million, and Robert is now on track to be the next 
and youngest Black billionaire.
    Finally, I think about the thousands of young adults who, 
with Congress' support, will become the inaugural cohort of the 
Next Generation Entrepreneur Corps. The American dream belongs 
to all of us and entrepreneurship also belongs to all of us. 
Thank you.
    Chairman CROW. Thank you, Dr. LaRock. Ms. Airheart, you are 
now recognized for 5 minutes.

                  STATEMENT OF DENYSE AIRHEART

    Ms. AIRHEART. Thank you, Chairman Crow and Ranking Member 
Young Kim. It is my distinct honor to be in attendance today 
virtually and to be able to speak on behalf of the small 
business community that we are so privileged to work with at Mi 
Casa Resource Center. I would like to share a little history 
about the agency I work for because I believe it gives insight 
and credibility to my testimony.
    In the late 1970s, Mi Casa began offering job training 
programs for women to help them break into higher-paying jobs. 
Recognizing self employment as another viable route to economic 
stability, Mi Casa expanded in the mid-1980s to include 
bilingual business development services to nurture the 
entrepreneurial spirit of low-income female and minority 
businesses.
    As Mi Casa has grown and developed we have recognized the 
need for programs to advance economic self-sufficiency for the 
entire family. In 2016, our mission evolved to reflect an 
expanded target population to advance the economic success of 
families with limited opportunities.
    As you shared, Chairman Crow----
    Chairman CROW. Ms. Airheart, if I could stop you for one 
second.
    Ms. AIRHEART. Yes.
    Chairman CROW. We are having a hard time hearing you. We 
have tried to turn it up on our end, but I think you might need 
to speak up slightly or get closer to your microphone, if 
possible.
    Ms. AIRHEART. Sure. Is this a little bit better?
    Chairman CROW. It is a little bit better, yes.
    Ms. AIRHEART. Okay, okay. The Women's Business Center at Mi 
Casa Resource Center supports entrepreneurs through all the 
stages of business development, helping them plan, launch, 
manage, and grow their business through bilingual consulting, 
long-term training, as well as business-related workshops and 
resources. In 2020, when we collectively experienced a global 
pandemic, we had to double down on our services and work even 
harder to meet the needs of the highly vulnerable community. We 
were able to help over 1,800 businesses, 45 new businesses were 
launched, over $2.7 million in capital were obtained with over 
a million of that being COVID relief, 27 new jobs were created, 
and 311 jobs were retained. Additionally, 24 patents were 
issued through the pro bono patent program, which is a 
partnership with the USPTO.
    So, I stand before you to say that the Next Generation 
Entrepreneurship Corps Act has the ability to be a catalyst for 
distressed communities. At Mi Casa what we have seen is the 
systemic issues that have been shared earlier today and what we 
do is we work hand-in-hand with these individuals to remove 
barriers to success. A program like NextGen has the ability to 
ignite economic development within distressed communities that 
continue to see brain drain, which is talent leaving a local 
community. Ultimately, NextGen would be instrumental in 
creating places where underserved entrepreneurs can reinvest, 
hire local, make a local, national, and hopefully in some cases 
a global change.
    Thank you again for the opportunity to speak on behalf of 
women-owned, minority-owned businesses from the Denver metro 
area.
    Chairman CROW. Thank you, Ms. Airheart. We appreciate it. 
And I think the issue was on our end actually. We turned the 
volume up in the room, so I appreciate you bearing with us.
    Ms. AIRHEART. No problem.
    Chairman CROW. And I think we are fixing it on our end. 
Thank you.
    Mr. Etkin, you are now recognized for 5 minutes.

                    STATEMENT OF CRAIG ETKIN

    Mr. ETKIN. Thank you, Chairman Crow, Ranking Member Young 
Kim, and distinguished members of the Committee. My name is 
Craig Etkin. I am the president and CEO at Intelligence360, a 
sales intelligence company that provides real-time data to 
clients to uncover new business opportunities. In short, we 
help other businesses succeed.
    In 2018, I graduated from the SBA Leaders Initiative and I 
would like to take a moment to recognize the extraordinary job 
the team at SBA in Houston does under the leadership of Tim 
Jeffcoat, SBA district director, and the work for Yusef 
Muhammad, southwest regional vice president at SCORE.
    According to the SBA website, since its inception in 2008, 
the SBA Emerging Leaders Initiative has trained over 5,000 
small business owners like myself, created over 6,500 jobs, 
generating over $300 million in new financing, and securing 
over $3 billion in government contracts.
    According to SBA's resource partner Interise, in 2018, 
Emerging Leaders alumni businesses saw an average revenue 
growth of 36 percent, Latino-owned businesses saw 64 percent 
average growth, and minority-owned businesses saw 43 percent 
average growth.
    In addition, minority-owned businesses operating in lower-
income communities saw 77 percent revenue growth and 60 percent 
of new employees were hired locally. It is from that 
perspective that I offer my testimony today.
    While the yearlong health emergency and associated 
lockdowns impacted everyone, some were more hurt and continue 
to be than others. Small businesses took the brunt of the 
pandemic. It is not a surprise considering small businesses 
typically operate under tight profit margins and are more 
vulnerable to fluctuating economic conditions, as well as 
changed in consumer behavior. The coronavirus triggered 
extremes in both cases.
    Small businesses are the backbone of the U.S. economy and 
are absorbing an outsized proportion of the direct and indirect 
impacts of the coronavirus. Policymakers in Washington should 
do what they can, not only to shore up current job creators, 
but encourage a new wave of entrepreneurialism more broadly.
    There are many existing successful programs through SBA's 
Office of Entrepreneurial Development, SBDCs, WBCs, and the 
Office of Entrepreneurship Education, SCORE, Learning Center, 
and the Emerging Leaders Initiative. Congress through the 
American Rescue Plan has already allocated $100 million to the 
Community Navigator Pilot Program for targeted outreach for 
small business in underserved communities.
    Rather than what is outlined in H.R. 1126, why not promote 
access to capital to these small businesses through the SBA 
Microloan Program rather than a stipend? Getting a microloan 
can be a great first step in creating credit history and 
building financial relationships needed to sustain and grow a 
business long term. Access to education and mentorship is 
available through SCORE, the Learning Center, and advanced 
training in the Emerging Leaders Initiative.
    Through Community Navigators connecting with new 
entrepreneurs through trusted community relationships, and 
utilizing existing programs at SBA, it is my belief we will see 
not just several hundred, but thousands of new businesses and 
new jobs created.
    Thank you for reviewing my testimony.
    Chairman CROW. Thank you, Mr. Etkin. I am going to begin by 
recognizing myself for 5 minutes and I would like to start with 
Ms. Airheart.
    Ms. Airheart, our community has areas that have been 
underserved for a very long time, and Mi Casa in particular and 
your work in particular works to prompt and invigorate 
entrepreneurship in some of the more underserved folks and 
populations. I would love your view as to what you view as the 
primary barrier as you are working with prospective 
entrepreneurs, what is the primary barrier they face in 
starting their businesses.
    Ms. AIRHEART. Thank you, Chairman Crow. What we see 
historically are systemic issues within the community. It 
really is--you know, for a lot of the Latinx population, whose 
families are working together, trying to stay together, and 
ultimately, there is that lack of leadership, mentorship. 
Through program like Mi Casa we work closely, very similarly as 
the other programs were designed and were talked about today, 
to really shepherd individuals through leadership training, 
business plan development, you know, presenting different 
opportunities to access to capital.
    But ultimately, I think it is just the lack of seeing 
individuals like themselves be leaders in their own community. 
So I think that is why this act, this bill really has the 
opportunity to ignite and really develop these distressed 
communities in a way that has not been done before.
    Chairman CROW. Thank you. And I know we have spoken before 
the support ecosystem in a community. Can you kind of just 
expand on some of the prior conversations about what an 
ecosystem means for our community and how that lack of an 
ecosystem can be overcome?
    Ms. AIRHEART. Sure. The support of the ecosystem, you know, 
can be modeled in multiple different ways. At Mi Casa we do 
that by peer-to-peer connection and then we take that, 
depending on where they are in their business, we then connect 
them to mentors within the community.
    Ultimately, what you see when these local business owners 
are successful is the stickiness. Right? They are able to hire 
locally, reinvest locally, keep their talent in their 
businesses, so, you know, it really builds upon the 
steppingstones that are created. And ultimately, what you are 
looking for is for these entrepreneurs and these small 
businesses to not necessarily leave these distressed 
communities, but turnaround and reinvest into them. Therefore, 
the ecosystem is strengthening that local economy.
    Chairman CROW. Thank you, Ms. Airheart.
    Mr. Dearie, I wonder if you might talk or expand on the 
issue of access to capital and why access to SBA lending 
vehicles is in some ways better than access to other 
traditional financial institutional lenders and what barriers 
might exist with those traditional lenders or commercial 
lenders and why the SBA vehicles in particular, in some 
circumstances, are more beneficial for entrepreneurs.
    Mr. DEARIE. Sure. The SBA plays a critical role, but 
particularly with regard to bank capital for new and small 
businesses. I am a former bank supervisor at the New York Fed 
and I can make a very good argument that banks are not the 
ideal source of capital for startups. Startups are inherently 
risky. Half fail by their fifth year. And we don't want, as 
much as we want to be supportive of startups, we don't want to 
damage the balance sheets of the nation's banks in pursuit of 
other national priorities. We got into trouble doing that in 
the housing crisis, of course.
    The great service, the SBA bridges that gap between 
depositories and new and small businesses by assuming some of 
the risk. And that assumption of risk becomes critical to 
enable bank capital to be a source of capital for startups in 
particular. Of course, other sources of capital, you know, from 
investors instead of depository institutions, are also critical 
for startups and are sort of uniquely appropriate in light of 
the risk profile of startups. And these sources are angel 
capital, venture capital, equity capital, where the investors 
bear the risks and if the startup fails, they take the hit 
instead of a bank or a depository.
    Chairman CROW. Thank you, Mr. Dearie. My time has expired, 
so I would now like to yield to the Ranking Member of the 
Committee, Mrs. Young Kim, the gentlewoman from California.
    Mrs. YOUNG KIM. Thank you, Mr. Crow. You know, I have heard 
from my employers in my district that not only are they having 
difficulty finding workers, but they are having finding the 
workers for the right positions and right workers for the right 
job. And I think, Mr. Dearie, you also listed that in your 
testimony as one of the top issues you and your colleagues have 
been hearing from small businesses as you conducted many 
roundtable discussions.
    So, for the entire panel would you be able to elaborate how 
we can increase worker skills and transition workers to new 
skills?
    Mr. DEARIE. Sure. You are quite right, there is a lot of 
attention paid, and rightly so, to access to capital. But 
access to appropriately skilled talent is just as important for 
a startup. You can't turn your idea, you can't turn your dream 
into a successful business without the staff, the employees 
that have the skills that you need. And we hear that at 
virtually every roundtable that we do. As I said, we have the 
jobs, we need to fill them to survive, we can't find enough 
folks that have the skills that we need.
    That is really an indictment of the U.S. educational 
system. We are simply not producing enough people that have the 
skills that 21st century businesses need, including new and 
small businesses. The bull's-eye of that, if you will, is STEM, 
science, technology, engineering, and mathematics. There has 
been a great deal of discussion about how do we address that. 
Certainly, it is a very complex question that has a complex 
answer.
    But certainly, I am of the view, and we hear this from 
startups, that a great under-used asset in this country is the 
Nation's community college system. There are 1,200 community 
colleges across the country. They are typically the first 
experience of higher education for immigrants, for example. 
They are great sources for people to be able to upskill, to get 
stackable credentials to, you know, lifelong learning. So, 
among the many things that can be done to fix that problem, I 
think leveraging the community college system is critical.
    Also, we need a more active conversation between the 
business community in this country and educators, so that 
businesses can tell educators, you know, here are the skills 
that we need. And if you are willing to amend your curriculum 
to teach those skills, we will hire those people. There is not 
enough communication, in our view, going on between the 
business community and the educational community.
    Mrs. YOUNG KIM. Thanks for mentioning that. That is why I 
introduced the Innovations in Informal STEM Learning Act and, 
hopefully, that will prepare our next generation of workers for 
the right jobs. So, I want to thank you for mentioning that.
    And I do want to pose the next question to all the panel. 
Small businesses create a majority of the net new jobs, but 
they are facing increasing costs, inflation, price pressures, 
taxes. So, I think you would agree that these pressures, they 
are keeping them from expanding and adding jobs. So, I would 
like to ask the panel what price pressures would you like to 
see eliminated? Dr. LaRock, you want to start?
    Mr. LAROCK. Thank you, Ranking Member Young Kim. You know, 
one factor I would point to is just the proliferation of 
regulation and the impact that that can have on startup 
entrepreneurs in particular. At NFTE, we work with many, many 
graduates of our program who try to launch and sustain actual 
businesses. And more than taxes, more than other policy issues, 
the regulatory burden that they face and the administrative 
burden is something that comes up a lot for our learners, in 
particular because these--many of our alumni are really trying 
to go it on their own as many entrepreneurs do.
    If I could just double back on to your previous question, I 
would like to underscore a couple of points that Mr. Dearie 
made in response to your question. A real opportunity for our 
education system is to do much more to expose young learners to 
the types of jobs and careers that exist. That is why the 
efforts of national philanthropies like American Student 
Assistance are so important and why we get a lot of traction at 
NFTE with career and technical education leaders because they 
understand that you don't have to be a welder or an electrician 
or an auto repair technician. You can have an auto repair shop. 
You can have an electrician business. And so we find homes in 
those types of schools where educators are making the 
connection between entrepreneurship, the broader economy, and 
personal self-fulfillment in doing of one's job.
    Lastly, and briefly, I would also like to underscore the 
particular opportunity now to help community colleges fully 
embrace entrepreneurship education in the way that we see four-
year public and mostly private higher education doing. The gaps 
that exist between community college entrepreneurship 
opportunities and what we see at other parts of higher ed 
sustain some of the inequities that we see in the system.
    Chairman CROW. The gentlewoman's time has expired. The 
gentlewoman from Georgia, Ms. Bourdeaux, is now recognized for 
5 minutes.
    Ms. BOURDEAUX. Thank you so much, Chairman Crow and Ranking 
Member Young Kim. And thank you to all the witnesses for 
joining us today.
    I want to start off with one of the issues that was raised 
by Mr. Dearie and elaborated on some in this testimony, which 
is about the rates of entrepreneurship declining, the 
concurrent decline in productivity. And I am just curious if 
you could elaborate more on, you know, why this is happening 
and are there certain sectors where we are really--we have seen 
this decline more rapidly over time?
    Mr. DEARIE. Sure. Thank you for the question.
    Alarmingly, the research that is--I will speak to your 
question as to particular sectors first, if I might. 
Alarmingly, the research that has been done on the decline of 
the share of all businesses that are new, you know, sort of an 
interesting gauge of the entrepreneurialness of the U.S. 
economy, if you will, indicates that the decline is pervasive. 
It is happening, and I am referring specifically to the very 
famous Brookings paper by Bob Litan and Ian Hathaway, who 
documented this decline in ways that had not been done before.
    They found it is happening in all 50 states. It is 
happening in all but a handful of 360 metro areas that they 
examined. And it is happening across every industry sector. So, 
it is pervasive.
    In terms of why it is happening, that is exactly the 
question that I asked in my own professional transition from 
financial supervision. When I found out about all this I got 
terribly interested in it and I went and I asked Bob Litan and 
Ian Hathaway and other people who had done the research why is 
this happening? And they said we don't know. We have certain, 
you know, ideas and theories, suspicions, but fundamentally we 
don't understand it. And it was with that in mind that I set 
out on the first road trip of doing roundtables with 
entrepreneurs around the country, asking them quite simply what 
is in your way? What is going on? Why is this happening? I 
wrote a book about that called ``Where the Jobs Are'' and it 
was as a follow-up to that book that I decided to launch CAE, 
to work with people like you to fix that.
    So, if you look through our agenda that is the appendix to 
my written testimony, it is chockful of specific ideas grouped 
in all of the subject categories that we hear from 
entrepreneurs at roundtable that my colleagues and I continue 
to do on a regular basis.
    Ms. BOURDEAUX. Okay. So, we have got some reading to do on 
that. Thank you on that.
    I just, you know, it does occur to me that, you know, prior 
generations, like my grandparents' generation, everybody had a 
small business, you know. It was just part of the fabric of 
their lives. And now so much of our business is consolidated, 
you know. It is the Walmarts, it is the Targets, you know, and 
it is just very, very hard for people to get up and going.
    Just another huge issue, my district is very, very diverse 
and this is for Mrs. Airheart. I wish we could duplicate your 
program all over the country. It sounds like a fabulous 
program. I just wanted to check in with you as you work with 
women- and minority-owned businesses, are there things that we 
could be doing or the Small Business Administration could be 
doing to help with the minority-owned businesses, help 
entrepreneurs from communities of color be able to access 
programs better or know the resources that are available to 
them?
    Ms. AIRHEART. Thank you for the question. Absolutely, I 
think there is always more that we can do. One of my mentors 
always said we have to educate the educated. We have to create 
an awareness of what exists in the community and how to access 
it.
    I am incredibly honored and privileged to work for Mi Casa 
Resource Center. I know that the individuals that walk through 
our doors feel like they are walking through a university, a 
local community college, and, therefore, they are leveling up--
we are leveling up their experience, their access, and their 
connectivity to other resources within the community. So, I 
think that the experience overall is so incredibly important.
    Funding for programs like the Women's Business Center or 
other programs that support entrepreneurship in distressed 
communities that focus on the BIPOC population is critical 
because these are the individuals that have the interest, the 
desire. This is--these are the new builders of the new America. 
And I think that we just really have to continue to support 
programs like the Women's Business Centers and other programs 
that the SBA has supported in the past.
    Ms. BOURDEAUX. Okay, thank you very much. I yield back the 
balance of my time.
    Chairman CROW. The gentlewoman yields back. I now would 
like to recognize the gentleman from New York, Mr. Garbarino. 
Also a fellow fanatic of apprenticeships as I am, so you are 
recognized for 5 minutes, Mr. Garbarino.
    Mr. GARBARINO. Thank you, Chairman. Yeah, big fan of 
apprenticeships. I don't think everybody should go to college. 
I think there is a lot of people, like you said, Mr. LaRock, 
that you can become a plumber and then, all of a sudden, run a 
plumbing business. And, you know, one of my good friends from 
high school did that and he now has--he makes a lot more money 
than I do, I will tell you that, so.
    Mr. Etkin, I have a question. The Biden administration 
released America's Jobs Plan in March, which focused on not 
just regular infrastructure, but other things as well, and not 
brick-and-mortar infrastructure. Right now we are in 
negotiations for doing just a brick-and-mortar infrastructure 
bill. How do you think prioritizing--would prioritizing true 
infrastructure projects over non-infrastructure spending help 
increase job creation and hiring?
    Mr. ETKIN. Well, thank you for the question. My grandfather 
was a plumber, so he never went to college and ran a very 
successful business.
    You know, we really need to focus in this country on 
rebuilding. There is a lot of need in infrastructure here 
domestically. And the initiatives to focus on roads and bridges 
and airports and really rebuilding our inner cities I think is 
a great first step in driving new entrepreneurial innovation.
    There are a lot of initiatives that I can't necessarily 
speak to from a policy perspective, but I know that when 
companies can rely on their safe neighborhoods and their roads 
and bridges to get to work are sound, they have the ability to 
hire and run a business from a good foundation in their 
neighborhoods. So, I wish I could answer the question beyond 
the brick-and-mortar.
    There are a lot of spending initiatives that I see that a 
lot of people are looking at going why? I mean, the numbers are 
staggering to small business owners to hear coming out of 
Washington in the trillions of dollars. And quite frankly, I 
think it is perpetuating an environment of fear right now in 
small business owners. They are concerned about inflation. They 
are concerned about hiring. A lot of their new costs are going 
into labor. They are having to attract workers back in from 
sitting at home. Small restaurants, I work with hundreds of 
entrepreneurs across the country, mostly in B to B, but some in 
B to C that are having real problems bringing workers back and 
staffing up.
    And I think that is due a lot to an environment of fear. I 
mean, we literally have moved from a health crisis to a crisis 
of fear in small business. Business owners are unsure of their 
future. They are unsure of being able to reopen fully. And I 
think a lot of that has been perpetuated by a lot of rhetoric 
coming from politicians from all levels of government.
    People are scared. They need to get back on their own feet. 
They need to hire and get back to work. And there are a lot of 
things being thrown up as roadblocks to doing that.
    And so, unfortunately, you see we are in a position where 
companies are struggling and they are struggling to get back to 
normal. And bringing employees back to work is, you know, I 
think a big part of the way they need to move forward. And----
    Mr. GARBARINO. So, Mr. Etkin, I just want to comment on 
that because I actually met with the new CO of the Chamber of 
Commerce yesterday. We had a meeting with her and part of the 
discussion was how about half of Americans, 49 percent, lost 
their jobs during the pandemic reported they are not active at 
all or not very active in searching for employment. I had 
spoken to businesses in my district that are searching for 
jobs. They want people to come back to work, they just can't 
find the workers.
    But it sounds like you are saying, you know, it might not 
just be solely the person not wanting to come back to work. It 
might--you know, the employers might be a little hesitant in 
brining people back. Is that what you are saying or did I 
mishear you?
    Mr. ETKIN. No, that is absolutely right and especially in 
areas where lockdowns are still--I mean, you see people waiting 
in lines just to go into a grocery store. I travel around the 
country. I mean, we opened in Texas very early. I think it was 
a good idea. It was scorned by many in the political circles 
across the country, you know, as a bad policy decision. But I 
see the benefits of, you know, opening business back up again.
    So, not only do you see a hesitancy from business owners 
about an uncertain path forward, but also a climate of fear 
with going back to work.
    Mr. GARBARINO. Thank you. I yield back.
    Chairman CROW. Thank you. The gentleman yields back. Now I 
will recognize the gentleman from Minnesota, also a serial 
entrepreneur, Mr. Phillips, for 5 minutes.
    Mr. PHILLIPS. Thank you, Mr. Chairman. And I would argue 
that nothing is more American and wonderfully politically 
unifying than entrepreneurship, so thank you for holding this 
meeting today to our Ranking Member and Chair and to our 
wonderful witnesses.
    In my experience, to become an entrepreneur you need 
inspiration, preparation, human capital, and financial capital. 
Those are the four legs of the stool. And on the subject of 
financial capital, I think we are all aware that only three 
urban areas in the entire country, both East and West Coasts, 
Silicon Valley, Boston, and New York City, currently account 
for 80 percent--80 percent--of all venture capital investment.
    So, on a subject that our Chairman already referenced, Mr. 
Dearie, what role can Congress play very specifically to better 
encourage a more equitable distribution of startup capital to 
parts of the country that right now are starved for it?
    Mr. DEARIE. Thank you for the question. It is an enormously 
important issue. It is one that we hear at every single 
roundtable that we do around the country. There is simply not 
an equitable distribution of venture capital across the 
country.
    Just to give you a quick example, it is just one that I 
know off the top of my head. I am sorry it is not your state, 
but it is a nearby state. At a roundtable in Michigan, we were 
told by entrepreneurs and investors there that the state of 
Michigan has access to or gets about 1 percent of total venture 
capital in the country, and 50 percent of that 1 percent is in 
Ann Arbor. And so the rest of the state gets--has to share the 
50 percent of the 1 percent that they get.
    We have been involved in, as you know--I believe that you 
were a House cosponsor of this piece of legislation and we 
thank you for that--there is a bill that was introduced and led 
by Senator Klobuchar in the Senate along with Tim Kaine and 
Angus King, Ro Khanna, yourself, Tim Ryan, and Terri Sewell, if 
I remember correctly off the top of my head, in the House. And 
what that bill is, called the New Business Preservation Act, 
and what that bill did, it borrowed from a very interesting 
experience that happened in Israel.
    In the late '90s, at that time practically 100 percent of 
venture capital was in the United States. It was an American 
phenomenon. Israel had lots and lots of new businesses stemming 
from the fact that when the Soviet Union collapsed in the 
late--in early '90s, a lot of folks immigrated to Israel and a 
lot of those folks were engineers and scientists. A lot of them 
started businesses. So, there was a lot of entrepreneurship and 
no venture capital.
    And the way the Israeli government tried to address that is 
they offered a one-to-one match of public taxpayer funds with 
private capital to lure American venture capitalists over to 
Israel to look around and consider investing in Israeli 
startups. It was enormously successful. We have the same 
problem except it is inside the country. We have 80 percent of 
venture capital in three cities.
    And so the bill would do exactly that, it would create a 
problem administered by Treasury to offer a one-to-one match of 
public dollars for venture capital invested in promising 
startups in heartland states. I think it would be enormously 
impactful. Everybody we talked to about it around the country 
is enthusiastic, both startups, entrepreneurs, and investors.
    Mr. PHILLIPS. I appreciate that. And perhaps we can even 
weave that into the Chairman's legislation, too.
    Mr. DEARIE. That would be great.
    Mr. PHILLIPS. Inspire potential entrepreneurs. Mr. LaRock, 
I got to say I love NFTE's entire model. And I was really 
lucky, I grew up in a family of entrepreneurs. I was exposed to 
it at a young age. And perhaps equally importantly I remember 
Business Day in elementary school, which really inspired me and 
introduced me to the notion of becoming an entrepreneur myself.
    So, in the spirit of rowing further upstream than we 
typically do, what specific steps can Congress take to inspire 
young people, at least introduce them to the notion of becoming 
entrepreneurs?
    Mr. LAROCK. Thank you, Congressman, and I appreciate the 
kudos to our organization. Honestly, I think the foundation, 
the foundational concepts of the NextGen bill are what is 
needed. The reason that we at NFTE are supporting the bill is 
because it reflects so much of what we have seen work with our 
own model. That is number one.
    The second is I really do think that our education system, 
and not just career and technical education schools, but 
academic, comprehensive high schools and middle schools need to 
start embedding career exploration and career-oriented 
education, including entrepreneurship, starting as early as the 
fifth grade, but most certainly by middle school.
    Again, innovative philanthropies like American Student 
Assistance are putting some funding into this and that is 
great, but it is a drop in the bucket of what is needed. And 
when Congress has the opportunity to review the Perkins Act, 
ESEA, WIOA, which has some allowable activities for youth, I 
would encourage Congress to take new opportunities to devote 
more funding for youth entrepreneurship, at least more 
flexibility.
    Mr. PHILLIPS. Love it. And I might just, as I close, 
perhaps we should consider changing our name to the Small 
Business and Entrepreneurship Committee. That would send a nice 
message to the country.
    And with that I yield back, Mr. Chair.
    Chairman CROW. Thank you. The gentleman yields back. The 
gentlelady from Illinois, Ms. Newman, is now recognized for 5 
minutes.
    Ms. NEWMAN. Well, thank you, Mr. Chair, and thank you, 
Ranking Member, for putting together this great discussion this 
morning. And I will echo Mr. Phillips' great idea. I think that 
is a wonderful idea, so I am on board for that.
    So, thank you all. Thank you to our guests today. This has 
been more validating, and I mean this in the best compliment, 
more validating than illuminating because this is what I hear 
in my district, that I think Mr. Dearie started out sharing 
what some of the challenges are for our small businesses moving 
forward coming out of the pandemic and as we work through our 
recovery and our economy. You know, and it is what I hear, is 
that, you know, that we don't have enough skilled workers. 
Therefore, we need more workforce training. Right?
    That our small businesses don't have enough access to 
capital. That childcare is a huge problem. We have lost 70 
percent of our childcare structures in this Nation as a result 
of the pandemic, and we have to support that.
    There has been denial of credit, particularly in Black and 
Brown communities of business. And then our immigration 
policies don't allow us to bring wonderful folks in to do the 
work that is needed, whether it is currently skilled workforce 
training and/or other.
    So, I think we all know what we have all been through, Econ 
101, that the only way the economy grows is when we have more 
people being productive. So, our immigration policies right now 
are a little bit challenging. We need to move forward and be in 
the 21st century around that.
    And then lastly, mentorship is a problem. So, really a long 
list. Right?
    So, I am going to challenge Mr. Dearie and Dr. LaRock to 
give me your top three. And the reason I ask you for your top 
three amongst those is that I would say we are trying to build 
legislation that prioritizes the biggest problems. And so if 
you can prioritize among that list of things that Mr. Dearie 
shared to address, that Congress can address, that would be 
super helpful.
    So, with that I will turn it over to Mr. Dearie if you 
wouldn't mind answering.
    Mr. DEARIE. Sure. These kinds of questions are very hard. 
You know, your top answer, your top three, but I understand the 
spirit behind the question.
    Reflecting the conversations we have had here today, I 
mean, if I were forced to pick three I would say, first of all, 
entrepreneurship in America today remains an overwhelmingly 
White and male phenomenon. We have been talking today about how 
important entrepreneurship is as a pathway to economic 
development and job creation. It is also a pathway to economic 
empowerment and financial empowerment for the entrepreneurs 
themselves.
    And so I would make a priority, a policy priority, make 
American entrepreneurship more inclusive. And that is exactly 
why we at CAE at an enormous fan of the NextGen Act because the 
specific intent of that is to promote entrepreneurship in 
underserved areas and among underrepresented aspects of our 
population. We need more women entrepreneurs who are active. We 
need more Black and Brown entrepreneurs who are active. And so 
I would make that at the top of the list.
    The other two, you know, we have talked about the--as 
Representative Phillips just referred to, if there were two 
other things that entrepreneurs need aside from their great 
ideas it is capital and access to properly skilled people. So, 
pursuing all ideas and all options in terms of expanding access 
to capital, and there are lots of ideas in the appendix to my 
testimony. And then also in terms of, as Congresswoman Young 
Kim put her finger on, the upskilling and the workforce 
training, the lifelong learning to make sure that entrepreneurs 
have access to the people that they need to turn their dreams 
into productive businesses.
    Ms. NEWMAN. Thank you. And Dr. LaRock, if you wouldn't mind 
adding to adding to Mr. Dearie's comments.
    Mr. LAROCK. Thank you, Congresswoman. I associate myself 
with Mr. Dearie's comments and just go back to, you know, the 
three things that I highlighted in my testimony. Focusing any 
effort on the disparities that exist and really building in 
equity as a design principle I think is vitally important, 
number one.
    Second, mentorship, an explicit component around mentorship 
is vitally important. Because what we have learned working with 
our NFTE entrepreneurs who have gone on to start and sustain 
businesses is that all of their success still doesn't make up 
in many cases for a lifetime of not having the social capital 
that they weren't born into. And government policy can't 
recreate that, those opportunities easily, but they can stitch 
together communities of interest, like minority communities and 
the business community. We do it in a private sector, nonprofit 
way at NFTE and I think it can be done through policy as well.
    And then finally, I just underscore what we already talked 
about regarding opportunities to promote equity and 
entrepreneurship in the education system as well, particularly 
in the K-12 education system, but community college as well.
    Ms. NEWMAN. Well, thank you both for your comments. Thank 
you for being here today and I yield back.
    Chairman CROW. Thank you. The gentlewoman yields back. So 
we have time, we are going to do another round for others who 
want it. And I will begin by recognizing myself for another 5 
minutes.
    I just wanted to kind of expound on this notion of 
infrastructure. And I am a huge supporter of the American Jobs 
Plan, President Biden's plan, because undoubtedly, I mean, 
there is, I think, universal agreement that we don't have 21st 
century infrastructure. That we made investments in 
infrastructure over 70 years ago after World War II, then we 
stopped making the investments in infrastructure and even 
stopped keeping it up for that matter. And you can't have 
bridges falling down, can't have roads, we have to expand 
broadband into vast swaths of America that don't have it to 
prop up entrepreneurship and level the playing field there.
    But, you know, one of the largest times of growth in 
American history was after World War II. There is a number of 
reasons for that, but one of the biggest reasons is that women 
entered the workforce. We had an entire segment of the 
population that was denied access to the workforce before and 
then they entered the workforce and it led to incredible 
economic growth for the country.
    So, looking at it now, we already touched on the issue of 
immigration and we have to reform our immigration policies to 
make it easier for entrepreneurs and incredibly talented people 
that come here to contribute to our economy.
    But, Ms. Airheart, just expounding on this notion of latent 
potential, We have all of this built-up latent potential, 
incredible talent, entrepreneurs sitting here ready to go. Can 
you just talk about in our community, if we are able to remove 
some of those barriers--childcare, healthcare, student debt, 
lack of ecosystem and mentorship--what would that mean? What 
would that look like? And how many folks do you think are ready 
to go to kind of bring our economy up to the next level in the 
21st century?
    Ms. AIRHEART. Thank you, Chairman Crow. You know, I smile 
because I think it is just--there is certainly a buzz within 
the entrepreneurial community and you nailed it. You talked a 
little bit about some of these obstacles, these hurdles, the 
childcare, the student loan debt.
    I also--on a regular we will do focus groups and we will 
meet with individuals that are going through a career pathway 
as well as are small business owners. And they will talk about 
having to make the choice between getting a job or not going to 
school because the student loan debt is so overwhelming.
    So, the way I think about it is that we have these small 
businesses and they are only able to grow to the point of 
butting up against these obstacles. Right? Whether it is the 
childcare costs, so they are not able to grow, they are not 
able to reinvest into their businesses because of these broader 
issues that are really systemic in our society.
    You know, the childcare costs, lack of access to it, is 
incredibly challenging for the women that we work with. At Mi 
Casa we provide childcare onsite for individuals that are going 
through our long-term training. And we see them, they come in 
with their young kids and they are so incredibly hopeful for 
their futures.
    So, I just feel like there is this ecosystem, this buzz of 
entrepreneurs, but the reality is that they are only able to 
grow to a certain level because of these broader issues that 
really put a cap on them.
    Something else that I would love to add is that earlier 
someone asked, you know, what are your top three, and I 
really--I think about financial education. I think that for the 
entrepreneurs that we work with on a regular basis, their 
financial acumen is not there and they lack the confidence to 
pursue capital investment. So, I just think that that is a huge 
area of opportunity that we can infuse into our youth and then 
really upskill them through education.
    Chairman CROW. Mrs. Young Kim, the gentlewoman from 
California.
    Mrs. YOUNG KIM. Thank you, Mr. Crow. I know we have been 
talking a lot about the American Jobs Plan that President Biden 
released in March. And since then, both sides have been working 
diligently behind the scenes to come out with a bipartisan 
solution that we can get to support because we do agree that 
there is a consensus in getting a good infrastructure 
legislation to get our economy moving. But President Biden's 
jobs plan calls for--you know, he started with over $2 trillion 
and his plan is prioritizing climate change and other spending 
over infrastructure provisions, and trying to pay for that by 
raising taxes, including those on the many businesses organized 
by C corporations and S corporations. But as you know, the U.S. 
Chamber of Commerce came out with the information that many of 
the C corporations, over 85 percent of them, are small 
businesses, too. So, raising taxes on C corporations will not 
just hurt the large businesses, but it will hurt all businesses 
and it will really hurt the economy as well.
    So, I would like to ask the panel, or, you know, one or two 
of you given the time, how sharply increasing taxes will hinder 
the ability of those businesses to grow and create jobs. And if 
you can cite some specific examples that would be very helpful. 
Go ahead, Mr. Dearie.
    Mr. DEARIE. I will start. Well, certainly, Congresswoman, 
all else being equal, any business, new or existing, would love 
to keep more of what they earn than less, for sure. Having said 
that, I think it has a lot to do with what the additional 
revenue is going to be used for. And I think at the roundtables 
that we conduct around the country, there is a broad consensus 
that we need to invest more in infrastructure, which supports 
the economy, supports business.
    The other thing I would pass on to you is that the tax 
issue that we hear more often than any at roundtables is more 
about tax complexity and uncertainty than where marginal rates 
happen to be. Business people can build a business around 
virtually any number. You know, just give me a number and I can 
build a business around that. What really drives them crazy and 
distracts them, takes their eye off the ball is when--it is the 
complexity and constant uncertainty.
    So, my counsel would be a more simple tax code, a more 
constant tax code, and let entrepreneurs focus on what they do 
best, and that is build and grow businesses.
    Mrs. YOUNG KIM. And I would like to ask Mr. Etkin if you 
can share your perspectives on this.
    Mr. ETKIN. Yes, thank you. It is amazing to me that at a 
time where so many small businesses are really just trying to 
find the new normal, that we are talking about increasing tax 
burden on small business. They are really having to come out of 
this pandemic, really look up at what their plan is for the 
next 2 to 5 years, and now they are facing a policy that is 
going to increase their tax burden when they are looking at 
just bringing people back on board and making it through 
probably the most difficult experience they have had as a small 
business owner.
    We have been in business for 22 years. We have seen the 
dot-com bubble bust. We have seen 9-11. We have seen the Great 
Recession. And now we hopefully made it through the experience 
of COVID. And it is my feedback that I get from the hundreds of 
entrepreneurs, business owners, CEOs that I work with at all 
levels that now is not the time to handcuff business and job 
creators with tax burdens, especially on non-brick-and-mortar 
infrastructure.
    I think there is consensus around the need to rebuild our 
roads, our bridges, the infrastructure that people understand 
are critical in having successful businesses, neighborhoods, 
and a base to build a future from. But when you start moving 
outside of that, I think that is when you really look at what 
are the priorities of this administration in terms of bringing 
jobs back and really allowing entrepreneurs to be uncuffed from 
the restrictions that they have seen over the last year?
    And so it is my opinion that now certainly is not the time 
to talk about increasing taxes on job creators.
    Mrs. YOUNG KIM. I appreciate your perspectives. Thank you. 
I yield back.
    Chairman CROW. Thank you. The gentlewoman yields back. I 
now recognize the gentleman from New York, Mr. Garbarino, for 5 
minutes.
    Mr. GARBARINO. Thank you, Mr. Chairman. Mr. Dearie, you 
just touched on a couple different things in a couple of your 
statements. And I don't know if my--well, my district is 
definitely different than my colleagues that are up here. And 
Ms. Airheart talked about childcare, healthcare, the 
limitations there being--needing to focus on that to help the 
job growth.
    I know for a fact that in my district businesses have left 
Long Island because where I am we don't have sewers. The roads 
are so old that they--you know, turning on and getting on a 
highway, you can't do it with an 18-wheeler because they didn't 
have them back when they were built. Our energy grid is so low. 
So, that is an issue on my district.
    You know, you mentioned the brain drain. You know, people 
are not trained for the proper positions that they need to be 
now and the focus on STEM and apprenticeships.
    So, it is all of the above? Does it matter? Is it 
different? Where should the focus be? You know, which one--what 
is the chicken and what is the egg and what do we start with? 
You know, out of all these different things we are hearing so 
much testimony. What do we start with?
    Mr. DEARIE. That is a very good question and this is what 
we are all here to debate. But, of course, you know, I think we 
all agree on what the issues are and it is a question of 
sequencing, a question of prioritizing. Certainly with physical 
infrastructure there is a broad consensus that we have--you 
know, we are way behind the eight ball and we need to do more 
now. All you have to do is drive the George Washington Parkway 
of the other side of the Potomac and you see that.
    However, there are other issues that are enormously 
significant. I will just focus on one, childcare, because we 
are talking about it. It is true that out of 40 industrial 
democracies around the world, the United States is the only 
country that does not have a national childcare policy. We are 
the only one.
    We did have a national childcare policy at one point in our 
history, and the Chairman referred to this sort of, and that 
was during World War II. And the reason was all the men were 
overseas fighting the war and we needed the factories to be 
staffed. And so there was an enormous publicly funded childcare 
program that led to, after the war, the entry of women into the 
economy and led to booming economic times, simply because there 
were so much more people in the economy starting and growing 
businesses and going to work for other businesses.
    When we do roundtables with women entrepreneurs and when we 
started the Senate Entrepreneurship Caucus in March of 2019, 
the very first event that we did with that caucus was a 
roundtable of women entrepreneurs that we flew in from all over 
the country. The top issues that they wanted to talk to the 
Senators about were barriers to them: healthcare, childcare, 
record student debt, and retirement security uncertainty. It is 
those uncertainties, those life risks that are keeping them 
from being entrepreneurs.
    So, those are super important issues. If we were to solve 
them, I am convinced that it would lead to a very significant 
boost in economic growth, job creation, tax receipts, et 
cetera, et cetera.
    Mr. GARBARINO. Do you think we should do that before we do 
brick-and-mortar? I mean, like I said----
    Mr. DEARIE. Yeah.
    Mr. GARBARINO.--in my district you can't open a restaurant, 
you can't open a business because the Health Department will 
tell you, no, we don't have sewers.
    Mr. DEARIE. Yes. Well, certainly if there are physical 
impediments to actually opening a business, that is top 
priority for sure. But I think it would be a mistake to push 
these other issues back on the backburner.
    I mean, you know, just continuing very briefly, the average 
American family pays $10,000 a year for childcare for one 
child. Childcare is more expensive than sending a kid to 
college in 38 states. Every single state in the Union and the 
District of Columbia fails the government's own definition of 
affordability in terms of childcare. That is a big problem and 
it is standing in the way of economic growth.
    Mr. GARBARINO. I did want to--I have a minute left, but one 
thing I have also heard, I have a lot of contractors and other, 
you know, businesses all around, that they are saying the cost 
of goods, inflation, I mean, they can't bid out projects now 
and--well, they can bid out, but the bids can't last longer 
than 3 days because, you know, lumber, everything, steel, 
everything has been going up.
    This is for the--maybe Mr. Etkin or Dr. LaRock, if you want 
to talk about it, or Ms. Airheart. What are we hearing from 
small businesses now about inflation? How bad is it on their 
bottom line? Anyone?
    Mr. ETKIN. Is that directed at me?
    Mr. GARBARINO. Hello, Mr. Etkin. You can start first.
    Mr. ETKIN. Well, I can speak of it firsthand. I am in the 
middle of building a building and we deal with contractors all 
day about pricing for materials. And it has been shocking to 
see the price differences in just, like you said, a matter of 
weeks on steel, on lumber, on availability, on timelines.
    Part of my business is monitoring the commercial real 
estate markets. We see projects in all stages going from design 
to bid to construction. I think we see that in that industry 
more than any other the impacts of supply chain issues coming 
out of the pandemic.
    It is a complex issue. It is not simply policy, but long-
term inflation is something that we all need to look at and 
watch closely. Because as I mentioned before, start talking 
about trillions of dollars of spending, I think that is at the 
back of everyone's mind, certainly business owners as well, who 
have to keep an eye on cost of goods. And so it is certainly 
something to be concerned about.
    Mr. GARBARINO. Thank you, Mr. Etkin. My time has expired.
    Mr. ETKIN. Yes, sir.
    Mr. GARBARINO. I yield back.
    Chairman CROW. Thank you. The gentleman yields back.
    So, thank you to all the witnesses today for this really 
enlightening discussion. It is something that is actually, 
unfortunately, more rare than it should be, and this is 
something called legislating and debating, which I know is a 
crazy concept for this body sometimes. But it was great. I 
learned a lot from all of you, so thank you for taking the 
time.
    It is clear that the entrepreneurship crisis is one of the 
bigger challenges facing this Nation. The title of this 
hearing, ``Jobs, Jobs, Jobs,'' was the title that we came up 
with because we wanted to be really clear that we want to get 
people to work. We want to get more people to work and it is 
not just getting them into jobs, but it is also getting them 
into great jobs and good jobs. And one of the best ways to do 
that is to grow new businesses, to expand the economic pie.
    This is a real challenge, but there is also good news in 
that this is one of the most bipartisan committees in Congress. 
We work really well together. We don't always agree on how to 
get there, but we actually do agree on where we want to be in 
the conclusion and what we are trying to achieve. And I look 
forward to working with all of you in trying to figure out 
these challenges, and the witnesses as well for informing both 
the staff and the members as we figure this out and have this 
debate and figure out how we can grow the economic pie and get 
people to work and really help rebuild the American dream is 
where we want to be.
    And, you know, part of that is continuing to have the 
discussion around the Next Generation Entrepreneurship Corps 
Act. I will be the first to say that is not--it won't solve the 
problem, but it is a first step. And if we take the first step 
we can build on that, we can learn from it, we can get people 
to work. And this is something that obviously both the House 
and the Senate in a bipartisan way has come together around, so 
I look forward to continuing to build support for that bill and 
others like it that we heard about today.
    So, with that, I would ask unanimous consent that members 
have 5 legislative days to submit statements and supporting 
materials for the record. Without objection, so ordered.
    And if there is no further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 11:23 a.m., the Subcommittee was adjourned.]
                            
                            
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