This is the first installment of a new CAP series called “Big Ideas for Small Business.” The weekly series aims to offer a collection of proposals that taken together will form a progressive pro-business agenda for the small businesses that provide employment, investment, and innovation for our economy. They are the proving ground for the future medium-sized and large companies that form the backbone of American competitiveness and prosperity.
CAP’s Economic Policy team will in this space offer a weekly alternative to simplistic conservative advocacy for irresponsible tax policy and unaccountable government that are hardly the real priorities of small businesses—and that will do nothing to boost economic growth and ensure widely shared prosperity.
The problem: A confusing jumble of government programs
The existing patchwork of federal programs designed to support small businesses and the three things most important to them—economic growth, technology innovation, and workforce training—do not reflect the needs of these businesses.
The federal government’s many small-business grant, loan, credit enhancement, and technical assistance programs are splintered, lacking any coordination or a strong strategic mission.
The hodgepodge of programs are today administered by the Economic Development Administration, the Employment and Training Administration, the Small Business Administration, the Department of Housing and Urban Development, the Department of Agriculture, and a swath of other federal agencies.
Many of these federal programs do support small businesses but agencies are not interlinked in ways that boost economic growth, technology innovation, and workforce development.
The solution: A common application for small-business support
Here’s a solution: Create a “common application,” or more precisely a streamlined interface for small businesses in need of federal assistance, which would allow companies to compete more flexibly for the full range of existing federal assistance programs.
The administrative burden of applying for multiple assistance programs is today too high for many small companies to manage, even if they might be eligible for several complementary ones. A common application—not unlike the common app for college admissions—would make the effort far easier, faster, and less expensive.
What’s more, integrating small-business access to the various agencies that administer them would allow for deeper and more strategic coordination among programs. Agencies like the Small Business Administration and Economic Development Administration have a wealth of tools that promote business creation, job creation, and technology innovation, but no management structure is in place to use these tools strategically and synergistically.
Finally, and perhaps most critically, a streamlined program with the authority to dispense diverse assistance tools (grants, loans, and technical and financing assistance) beyond small businesses to supportive institutions like schools, regional development organizations, and research institutions, would help connect all of these potential beneficiaries. That in turn would help cultivate more productive, collaborative, and competitive business networks and vibrant local and regional economies in which small businesses thrive.
Next steps: A presidential executive order
Over the past three years, the Obama administration has taken important steps toward increasing strategic coordination of federal assistance to small businesses and the regional economies that support them. In late 2010 the administration announced the winner of the Energy Regional Innovation Cluster competition, which attracted applications from 30 regional consortia competing for multiagency funding to create an incubator to develop new technology, new businesses, and new jobs in the building energy efficiency sector.
And in 2011, the Economic Development Administration teamed up with other agencies in the i6 challenge program and the Jobs and Innovation Accelerator program to help small businesses in regional economies across the country commercialize new technologies in diverse industries. These were important moves, and they pave the way for the launch of a common application program that will provide a single point of entry for small businesses seeking government assistance.
Now, the White House should catalyze increased agency collaboration to the extent possible by issuing an executive order laying out a vision and deadlines for such an initiative. In the long run, of course, congressional action is needed to bring the mismatched missions of the many small-business-oriented agencies and programs in line and up to speed with 21st century thinking. But making better use of existing federal resources is a no-brainer in the short run and the long run. Given what we now know about the interconnectedness of trade, technology, training, and economic development, it makes no sense to continue to administer these small-business programs separately.
Sean Pool is Managing Editor of Science Progress, a project of the Center for American Progress.