6 Bold Ideas for Putting the Nation's Small Businesses Back to Work
Sometimes you run across high-level policy proposals to drive small business growth and you wonder if they ever have a chance of being relevant.
You might say that about the Milstein Symposium's six point plan, put out by the Miller Center at the University of Virginia on Friday. The symposium, a five-year initiative, convenes a nonpartisan commission charged with fixing what's wrong with the U.S. economy. Specifically, it puts small business at the center of a plan to rebuild the middle class and get the country innovating again.
And its first report, "Building a Nation of Makers," is filled with lots of great ideas and a wealth of erudition. But you can't help but wonder, given the current conflicted state of affairs in government, whether any of this high-volatage thought will ever see the light of day.
"Throughout our nation’s history, manufacturing SMEs have been an engine of well-paying, middle-class jobs," Gerald L. Baliles, director and chief executive of the Miller Center, and a former Virginia governor himself, says in the report. "Over the next decade, advanced technologies, major shifts in global demand, and greater emphasis on customization will fundamentally redefine manufacturing and create significant growth potential for SMEs. But for American firms to thrive, we must out- innovate the global competition."
Chaired by Former Mississippi Governor Haley Barbour and former Indiana Senator Evan Bayh, it also counts among its members high-profile names like John Engler, president of the Business Roundtable and a former Michigan governor, as well as James Fallows, the well-known Atlantic columnist.
Here's a tidbit from the report:
We focused specifically on small- and medium-sized manufacturing enterprises (SMEs). According to the 2010 Census, the more than 258,000 manufacturing SMEs in America represent more than 98 percent of all manufacturing firms and employ 4.9 million workers. While overall manufacturing employment declined from 21 million in 1972 to 10 million in 2010, the share of jobs provided by SMEs has grown from 29 percent to 45 percent. Even in the rubble of the Great Recession, SMEs were one of the few sectors of the American economy to thrive. Further, approximately 90 percent of the inputs used by multinational corporations come from SMEs, providing further incentive to dedicate our national attention to supporting this vital sector.
Still, here's to hoping that this report, in particular, will indeed make a dent on Capitol Hill. Here are six of the report's key ideas for building the economy back up again:
1. Government-backed talent investment loans will give small businesses the capital to hire the workers necessary to expand their businesses, as well as to increase the skills of these and current employees.
2. "Upside-Down Degrees" to connect classroom learning with on-the-job learning. These programs will allow students to transfer accredited technical training, work experience, military training, or community college coursework as credit toward a bachelor’s degree.
3. A regular survey of employers to determine current and projected skills needs--commissioned by state governments, with data freely available to the public--that will allow businesses, policymakers, and educators to tailor their programs in real-time in order to forestall projected imbalances between skills and employer needs.
4. A national supply chain initiative to fully map America’s manufacturing ecosystems, which will allow businesses and policymakers to fill gaps in the existing infrastructure and keep up with rapid changes to ecosystems formed around emerging technologies.
5. Expanded technology and engineering certification programs, giving high school students the opportunity to acquire a certified technical skill before graduating high school.
6. A “Big Trends-Small Firms” initiative to distribute the latest technologies to manufacturing businesses. Emerging technologies promise to produce major disruptions to established business models, yet small businesses often don't possess the tools to leverage these technologies. A “Big Trends-Small Firms” initiative, implemented through the Commerce Department’s Manufacturing Extension Partnership, will connect small- and medium-sized manufacturers with the latest trends.
Lest you think this is all nonsense, I spoke with Rebecca Bagley, also a Milstein commission member, and president and chief executive of NorTech, an advanced energy cluster nonprofit in Northeast Ohio.
NorTech, an exmaple of the sixth plan idea, seeks to connect large and small companies, to make sure that small businesses can bring their big ideas to market.
In the past three-and-a-half years, the 100 companies under its purview have created 900 jobs and have $60 million of capital investment, Bagley says.
In its portfolio is a company called VADXX Energy, a small business that takes resin waste from the automobile industry and turns it into petroleum. It lacked the resources to mass-market its process, Bagley said. So NorTech got in touch with a much larger company, called Rockwell Automation, which is helping it build a large manufacturing facility through a $15 million investment from private equity firm Liberation Capital.
"If you can have a partner in the development of the business, it helps the region and the business," Bagley says. Maybe there's hope for some of the other big ideas in the Milstein report, too.