As our economy improves, are U.S. small businesses getting the capital they need to grow, to create jobs and to accelerate our country's economic momentum?
That's the central question that will be addressed today as some of the country's leading entrepreneurs, investors, bankers and policy leaders gather for the third Capital Access Innovation Summit, hosted by the U.S. Department of the Treasury and the U.S. Small Business Administration (SBA).
Over the years, these summits have focused on developing pragmatic solutions and new financial tools that draw on the best ideas from both the public and private sectors.
The first summit was held during the heart of the financial crises. The goal was to come up with innovative, concrete ways to unfreeze the capital markets and to get lending flowing again to small businesses when they needed it most.
Several of the ideas discussed during the summit ultimately became part of the Small Business Jobs Act of 2010, which was the most comprehensive small business legislation in over a decade and a critical tool in helping small businesses navigate the economic downturn.
As the commercial lending markets improved, we convened a second summit to focus on challenges in the equity and IPO markets. Several of the pieces of the bipartisan JOBS Act, including crowdfunding and an IPO on-ramp for smaller companies, were discussed during the summit and in subsequent meetings.
Today's summit will focus on how we accelerate economic growth by filling remaining gaps in the credit markets. Participants will discuss how the public and private sectors can utilize new technologies, opportunities to leverage improved data analysis and how large corporations can spur entrepreneurial ecosystems.
For example, are there ways to use data analytics to improve small business credit scoring models? How can large companies better promote small business growth? And how can more investors use public-private partnerships to get capital into the hands of high growth businesses outside of traditional start-up hubs?
The goal, as with previous summits, is to take the best ideas from the meeting, develop them, and work with leaders across the country to make sure these ideas are implemented.
Today, according to a recent New York Federal Reserve report, 49 percent of small businesses surveyed said that access to capital was a growth challenge and more than half reported that they needed additional capital in amounts of $100,000 or less.
In addition, challenges exist in the venture capital space. For example, nearly 70 percent of venture capital goes to just three states: California, New York and Massachusetts, leaving many promising companies across the country struggling to turn great ideas into viable businesses.
In fact, a recent report from PricewaterhouseCoopers and the National Venture Capital Association showed that entrepreneurs in Silicon Valley received 40 percent of all venture capital in 2012, up from about 30 percent in the late 1990s.
We know there are entrepreneurs building promising businesses outside of these areas, in places like Ames, Iowa, Austin, Texas and Nashville, Tennessee. And the growth and competitiveness of these businesses is what will ensure America's long-term economic strength and our continued ability to innovate. Small businesses and entrepreneurs drive job creation, foster new technological advances and make large corporations more globally competitive.
The key to accelerating our economic momentum is expanding the playing field to ensure that the right types of financial tools are reaching these businesses and that lending gaps in these areas are being filled. All across the Obama Administration, we are working with leaders in the private sector to get entrepreneurs more of the resources they need to grow and succeed.
America's entrepreneurs are resilient. And they are ready for that next challenge. By ensuring that they have the capital they need to bring their ideas to market, we will strengthen our economy, accelerate job growth, spur new business formation and fuel American innovation across the nation.