is being well looked after with or without the support of the other nations that can free up certain capabilities for the other nation to focus on a different area. so i think certainly from an operational point of view, it would be very helpful. ..

>> in the united states i am sure you are very aware that we are in the midst of significant budget battles and dysfunctions one might say, and for those of us who watched defense we are

particularly the implications of that for u.s. defense strategy and planning. i'm wondering how you would describe the cuts in defense in canada. i don't think you have quite the political environment we do right now but surely you must have the same sense of general interest in how canada plans to go forward and again strategically where canada wants to be in terms of its role in the world and how to underwrite that with military capability. i would love to hear a little bit about the efforts underway in canada including your own defense reform initiative. that looks to cut inefficiencies to free up some funds. >> good for you you've got the name right. the defense renewal team has worked a year. one of the first tasks in taking on this position was the direction to maintain everyone and the numbers that i have in

the regular force and the reserve forces, all of the capacities and capabilities that we have got right now but find a billion dollars and five to 7% of our entire budget, to take out of the back rooms in the administrative processes to reinvest in the operational part of the forces. that was a very difficult task in the past. those with as many years and as i have are seeing that we have had ups and downs over the last 35 years and usually in the down period we decrease in size and our capabilities. this is a very heartening task in one sense because those very difficult things were not the center of the task and we think we have actually put our finger on 26 initiatives and under seven headings that will allow us to find several hundred

million within a couple of years and going onto a billion is required in five years and going ahead. we'd like all departments ,-com,-com ma like all western countries i think are suffering from many of the same fiscal challenges that your country is, and we went through a strategic review several years ago and a deficit reduction action plan all of which has decreased our budget by 10 to 15% and this is required in all kinds of trade-offs by the way too. going forward and recently we just had the speech from the throne that indicates that the government is looking to refurbish their canada first defense strategy ended up way allows us to look at where we can invest in new areas. so there will be trade-offs to come certainly within a stable and below both resources. >> and then the last question i

wanted to ask is on norad. you mentioned in your comments the expansion if you well into the maritime domain. i think there's a lot of interest too on cyberdomain and you did reference the norad strategic review that's now underway. can you give us the areas he works lowering u.s. can it explain a strategic review and what types of changes we might expect to see come out of that? >> i know that the commander of norad who is the u.s. commander of norad but the canadian commander of norad and that's general chuck jacoby together with his deputy, a canadian, are going through a systematic review of threats that norad expects to potentially face them in coming decades and what kind of intelligence surveillance recognizance is required not only for the aerospace threat but also offshores, all the way

to how do you harden the very core of norad capabilities from cyberthreats? and as you may well know much of norad's current early warning system is raised on a distant early warning set of radars that were put up in the 1950s and refurbished in the late 1980s. that is coming around again and i know one of the things that norad is looking very carefully carefully at is how do you move that forward to provide more warning time and doesn't need to be ground-based or are there other ways to do that? these are fundamental questions that speak to the strategic threats facing our two nations. >> i will turn it over to stephanie kostro who will relay questions from the audience. >> the first line is almost always thank you so much for your candor and for being here and agreeing to talk to to us a thank you on behalf of audience

members. the way sam and i have divided these are sort of topic lee. i am the lucky person to draw draw the short star on the budget questions of the first two questions are very discreet and they are about -- one is about the auditor generals report that was reported in the news earlier this week about the planned procurement strategy for ships and given the auditor general's somewhat candid and scathing remarks on the inflexibility of budgeting, you give us a little bit of your insight into how do you think about the longer-term thirty-year strategies for ship procurement when it comes to the rise in labor and material costs? the second specific question was about the close combat vehicle and f. 18 follow on so those are the more difficult programmatic questions and then the sticky question, maybe not a difficult question but the sticky question

looking forward in the next 10, 15 to 20 years you have talked a lot today about importance of working together as a team but in light of as you mentioned the fiscal cliff here in the u.s. and canada how do you think about being a coalition partner and what are you looking to the u.s. to provide as well as a coalition partner? >> well thank you very much and they think what i will do is take the second one first in the series of first one second. what we will seek from the united states certainly at home is to be a great partner as the u.s. armed forces have been over as they say 100 years in the security of the continent. but i think that like most other nations, we will be seeking good strong cogent leadership from americans internationally.

it is unfair certainly how we all seek the american point of view but what wonderful things it says about the people of this nation, the leaders of this nation that so often that desire from coalition partners is met time and again. americans i think largely may be feeling some fatigue from having had that leadership position for so long and yet it comes with having done a leader perspective for so many years. on those first questions, the very heartening thing is that as we go forward with the rewrite of the canada first offense strategy the government makes very clear to me that the commitment is there for the equipment that was listed in canada first defense strategy

based on 2008 so this includes a replacement for fighter aircraft it includes a replacement of several vehicle fleets for the army and includes a series of ships including art did offshore patrol ships and joint supply ships, joint supply ships and a new combat surface combatant. i think what has surprised canadians certainly auditors general recently and maybe even members of the military government ourselves over the recent years is when we talk only about the price tag and then expand to take a look at what it will cost to run the equipment. when you buy your ford cortina you come up with one price and when you add everything for running it for the 23 years that you will run it it's entirely a

different costs. the nice thing about that different price, that long price the one that includes operation and management for many years is we hold a leper on that so in fact we can throttle back or throttle forward with strategic and operational needs. the part of course i am most interested in as the chief of defense staff and the individual who provides options for our government to be not only in the defense community interest but also as good coalition partners is having the equipment they are so i very much am heartened by the fact that the government remains committed to these things and i look very much forward to doing delivering the first of these vehicles. how many come, the numbers are a first offense strategy and i have every hope that those numbers will remain the same. >> thank you.

>> thank you and i have a number of questions here so beginning with the framing that secretary hagel last week released the u.s. department of defense arctic strategy and the halifax along with the fact that canada currently leads the arctic counsel

we just arrived there as our friends from the united states air force arrived having started that from alaska. but this does speak to, it was a very interesting presentation that the secretary of defense hagel had at the halifax international security on the weekend in which he presented the framework of the united states going forward. and it spoke not only to the importance of the arctic but also towards environment and climate change.

all of these things are very heartening in that it confirms the fact that the united states is like-minded with canada and in fact all our conditions in seeing the arctic is free of military competition. that is a very important point, because it frees the military chiefs of defense like myself to focus on dividing military support to civil authorities and all of those things appeal to all of our better angels. a couple of years ago i was head of the missions with delegations from each of the arctic nations to discuss the arctic search-and-rescue which did end up a legally binding treaty which really was a tremendous step forward and enlisting all the capabilities, meager as they may be and i'll tell you if you

are thinking of being in adventure in the far north better wear a wetsuit or if you fall in better be prepared to survive for a few hours while we determine how best to get to you. the fact is that anything that happens in the north on the small-scale or large-scale is going to require the efforts of one, two or several of the arctic nations up there. so these other missions like the military input to support an environmental disaster, these are the kinds of things we are working on not the basing of troops up there with the idea of providing military might or capability for that purpose. >> another question from the audience. your reviews of the u.s. use of lethal unmanned aerial systems, drones, by the united states and afghanistan and elsewhere and the second part of that question is does canada have any plans to

purchase this capability going forward so views on the united states use and since 2002 when the first one was fielded and the use on whether canada leads this capability? >> it think it's fair to say that military leaders of any kind will have very few intrinsic concerns about the use of kinetic force in support of a valid operational campaign, so if a kinetic round is propelled towards an enemy, a confirmed enemy for strategic purposes by a rifle, by an artillery piece, by an aircraft manned or an aircraft unmanned, any of those that end up with a desired end state is supportable point of view. to answer the first part, sorry the second part of the question.

the canada first offense strategy back in 2008 signaled that canada would be finally buying its own capability of unmanned aerial -- aerial vehicles and it's yet to be determined whether our squirrel carry lethal capabilities onboard or simply be for the lead tronic optical and ir surveillance but having said that has been effectively using unmanned aerial vehicles themselves rented, leased to the afghanistan war and on order ships that are right now in the reagan gulf to the great effect. so we are in the game along with many nato allies and delighted by the capabilities it gives us to use the high ground in recognizance and surveillance. >> to ask two questions, unarmed isr capable unmanned systems would seem to be a great way forward in the art take for a maritime domain awareness.

is there any effort underway to old the architecture there that uses unmanned systems? >> that's a great question because even as we go back to one of our earlier distant early radar warning line only provides a warning short of the art archipelago. they are on alarms by the alarm system we have got in place right now and the sense is that unmanned aerial vehicles can go into a spot which is very difficult for human beings to operate in for a good portion of the year and provide us that. the unfortunate thing about it of course is you quickly run into communication problems us in his youth get above 60 degrees north, 65 degrees north and you can no longer see the satellites that are in geostationary orbit over the equator. therefore when we talk about infrastructure it's less about

towers on the ground or buildings on the ground and more about a constellation of satellites that provide you this communication. once you have got that link, once the endurance of these machines that allows you to send them out and bring them back. so there is also an interest in aerostats and the tech knowledge event that can bring. each of these, for anyone who has been in the art dig and speak about that and certainly we are opening up a new set of beachfront properties up there at a much greater rate than we expected that anybody who has been a fair and has actually worked or flown in the arctic will know for a good torsion of the year it really is a terribly inhospitable place and very difficult set of challenges for everyone to operate anything. it's of great interest to us and i think like you he we will find a mixture of manned aircraft and unmanned vehicles and tethered

vehicles to provide that capability. >> i have one question about the norad strategic review and if i could ask you to put your pirate hat back on. with norad in charge of aerospace control for 50 years and adding an additional mission for the maritime warning can you talk a little bit about what the future may hold for norad and what kind of additional mission sets from a canadian perspective might like to see? >> that's very interesting because back in 1950 it truly was only aerospace defense. bombers we pretty much knew where they would come from and if they were going to come it would be up over the north pole so it was unit directionally focused and you knew what you need it to defend yourself. of course i think it's our parents or our grandparents who trained in getting underneath

their desks for that threat and there were over a couple hundred thousand people who daily war a norad patch to work. when people say that things have gotten tougher and more complex in the strategic arena, i think they are right. it is more complex but my goodness we have certainly stepped back from the potential set of threats that was so apparent and existential at that time. today we count approximately five to 7000 people canadian and american who were a norad patch to work. there are others who support norad but really that number is coming down with a the decrease of that existential threat that we no longer look direct north. now we talk in terms of intercontinental ballistic missiles and those are specifically people over the north and make him over the west or may come over the northeast to hit downtown north america. so really that directional luck

luck -- luck that we defend against is now directional and ever since 9/11 inward. so i think, and a recognition that france can approach from offshore as well so this linkage of the maritime warning, not the maritime defense that maritime warning that came in 2006 really did expand norad's warning piece of the west and naturally comes along, now that you have got this very inefficient and affect warning capabilities that goes directly into our most senior decision-makers what else could it be used for? could norad and cybercommand for instance in getting the message out to the senior decision-makers when the time comes rather than have cyber itself stands on something

like that. are there other inputs that can be coalesced, brought together in kind of an integration center at norad to provide the sorts of warnings? i think what we will find is the answer will be yes and it will be interesting to see just exactly which capabilities norad will be given to respond. right now it's only within the aerospace defense line that norad has any duty to respond. >> this is another arctic question. this is specific to asking, do you see the arctic counsel is ever having it touches for acquisition of military hardware i.e. surveillance recognizance or search-and-rescue capabilities? so should there be an operational role for the arctic counsel and is that a possibility going forward or will it just be bilaterally and multilaterally?

>> that's a very interesting question. i have to in full disclosure say that of course canada's partnership in the arctic counsel is in the foreign affairs department and the one thing we do in support of the arctic counsel is done in support of efforts what we call foreign affairs and international trade and development. i think what i would say is what the military can do in support of the arctic counsel and maybe there are some implications that would shed some light on that question, is exactly what we have done over the last couple of years and as the chiefs of defense of the arctic nations we grouped together at least once a year to discuss capabilities that are in support of our mutual civilian authorities. it's a wonderful crasher release point between russia and the

other seven arctic nations, because again most of these things appeal to everyone's better angels. so i don't think likely most of the civilian authorities will require in terms of operations the north will be supplied by the militaries of those eight nations. i think it unlikely the arctic counsel itself will become an operational function. i think it will continue to look at the militaries so then the question comes to what will the militaries band together to buy pieces of equipment? i think that's probably less like we have developing individual national capabilities and then throwing them for certain operations into the bin as we would to support an art search and rest operation. >> i have a question from the audience that talks about a little bit more border focused

than what we have been talking about in terms of interaction between the two militaries and given the canada command has been merged into canadian joint operations command. >> that's right. >> i would like to note that the interaction between the canadian command and northern command and op rations along the order what springs immediately to mind is conflict management because if something happens in vancouver if there is a -- seattle is at risk so could you talk a little bit about border cooperation to train a two militaries? >> you write. you may be aware that there is a combined defense plan. it almost dretke to that and i think that combining of our expeditionary command and our canada command and operations support into and you just named the canadian joint operations center has been -- has had a coalescing effect for discussions with northern command as well wear where the

as they would have to discuss with more of portion operational commands on the entire command and its focus in the coalescing weight. so i think we are very careful with the border. we don't approach the border from disaster response purposes the way we do for aerospace defense purposes. i think some people would say that if norad were not stood up as a bi-national command as it is now, back in 90 -- 1958 for existential reasons we likely would not have suited to each other the sovereignty that goes along with it but having done so and having had no problems and the idea of not having to get the authority to fly our jets south across the border to prosecute requirements for norad is really a useful thing and exactly the same for american jets going north. not so regarding disaster

management and consequence management. we are are very respectable to each other's borders, very respectable to the requirement of the permission to carry weapons into other's territory but it's also an easy process because it's based on one of unbroken trust. even though it's a bilateral relationship is to post to a bi-national relationship i think we have seen it having great effect in not only with gustav and various other disasters that have befallen our states and provinces. we have been a great help to each other but also as you said during the olympics so much nuclear biological and chemical capability that was resident in the states just under canada was put on offer to the canadians as required should it be required during the olympics. it wasn't but there was a perfect example of how our combined defense planning could support potential operations.

>> this will probably be the last question from the audience. the quadrennial defense review is going on at the pentagon now and you will see chairman dempsey later today. what advice might you offer him on an issue that you would like to see taken up in this qbr from an allied respect this? >> i hesitate because it's a very presumptuous thing that i would counsel. general dempsey as he deals with prayers -- potential sequestration 2.0. i think i probably would fall back to that very thing you said a little bit earlier and that was that i am only one chief of defense representing one military amongst dozens of others who will look to the united states armed forces, the

leadership of the united states armed forces for leadership in the problems that will face roots of us all of us alliances with and alliances going forward and i think there really is and i haven't noticed it from the chairman himself that there is a sense occasionally of fatigue amongst those nations that so often needs to take up that role. so if the chairman asked for my advice i would say keep on doing those tremendous things that you do which is including capabilities of international leadership and we have very much learned from our american reference how best to do that. love to take on that role ourselves but i can tell you the nations in the world will look for canadian involvement in these things and they will be seeking u.s. leadership going forward as they have in the past. >> i can't let you go without

talking about nato. i'm amazed that it hasn't come up yet so since his last question i will ask it of candidly and you can take it where you like. you mentioned in your remarks the continuing importance for the u.s. and canada transatlantic link, nato is approaching another summit and coming to the different phase of its operations in afghanistan. there have been smart defense suggestions. there have been framework partners suggestions. what is your sense of where nato alliance needs to go to capture and defend common interests? >> i think when we look ahead and see nato five years from now the supports most likely of challenges and issues that will face us we will see one that has more interdependence and reliance.

.. moving therefore for exercising. that's not absolutely necessary. there are nations regularly in the states and others that train regularly in canada. we can coalesce for a force that allows us to be training here. so i think we will see us working smarter and more

interdependent we get using fewer dollars to provide the capabilities that we have seen in the recent years. >> i will let you off the stage with that. thank you so much for spending time with us. i know you have a busy schedule. i know the weather is mild from your perspective and i have no doubt you will have trouble getting back to canada while the airlines shutdown. we appreciate your time today. please join me in a round of applause. [applause]

you can see this program again any time ask c-span.org. check the video library. coming up live president obama in california addressing a crowded dreamworks animation highlighting the impact the entertainment industry has played on the economy. part of the west coast fund-raising. you can see the president lives of 3:15 eastern on c-span. also coming up tonight on c-span2 recent testimony from epa

>> i think the word entitlement often has a negative connotation that the goal is for the women and girls to operate with a greater sense of entitlement, to say that i am deserving of the opportunity. i am prepared and i am qualified to read buarea that it's all ofe other nagging insecurities that get in the way. swanee was eluting to it earlier but it takes a minimum of seven days to convince a woman to run for office. would you venture to guess how many days it takes to convince a man? [laughter] >> it actually isn't a joke. [laughter] i can say i was recruited to run for office. that is the case for most women. i wasn't in some corner

politically calculating my political ascension. i had been an aide to senator john kerry for 11 years and to joseph kennedy ii and was enjoying being the person behind the person and found great influence and a reward in that prior to my being recruited as never been a woman of color elected to the council. >> how many times ha have they asked you? >> more than seven. >> you can see that in per tire program tonight at eight eastern. the supreme court today decided to take up another case involving part of the nation's health-care law. the ap writes the white house is welcoming the supreme court's decision to referee another dispute over president obama's health care law that involves a provision that requires most companies that offer health insurance to workers to include contraception among a range of preventive hold benefits. the issue divided the lower court. justices will hear arguments probably late in march. a decision is expected by late june. the white house responded in

part saying the administration has already acted to ensure that no church or similar institution will be forced to provide contraception coverage and has made a commonsense accommodation for nonprofit religious organization's also, house speaker john boehner has released a statement that includes base, the this, the administration mandate is an attack on religious freedom and i'm hopeful it will be reversed by the court. the 60s were different. [laughter] there were a lot of things happening involving race and the breakdown in structure and society. in new england there were no rules and without structure it's very difficult.

i was extremely fortunate to still have had a way that i was raised by and the seminary i had already been predominantly in white schools in savanna for the transition to the school with very few blacks in a difficult set of circumstances academically and otherwise, i had a sort of jump start. i was ahead of the game, so i have something. it continued.

the aspen institute recently held a discussion looking at micro enterprise and how it can spur job creation. like road enterprises are small businesses with five employees or less started with a small amount of capital. panelists examine how federal and state policy can support these small businesses and encourage people in impoverished communities to become economically empowered. this is about 90 minutes. >> i would like to welcome you to this afternoon's events in which we will be discussing micro enterprise has a job creation strategy. at an economic opportunities program, we are focused on the challenges that low to moderate

families face today in time to earn a livelihood in today's economy. we work with a variety of local initiatives and institutions that are developing new strategies that are supporting the economically vulnerable and trying to promote their economic success. we've been hosting a series of conversations that bring together diverse perspectives from policy come academia, business, education and other things to discuss the challenge that low income americans face today and new ideas that can address these challenges and help move us forward. today focuses on the potential of micro enterprise to discuss this in today's economy and draws on research and policy analysis developed as part of the big ideas for job series that is supported by the casey foundation and the kellogg foundation and we are particularly grateful to the casey foundation for their support of today's event and i

want to acknowledge bob and patrick who are here with us today. and to start us off, i am the lighted to introduce don who has three jobs so i will try to get all three] to the assistant secretary fosecretary for smalls community development and housing the u.s. department of treasury and the executive director for the president's council on jobs and competitiveness and in his free time, he gets to go to detroit where he is leading the government investment in the tried and working with city, state, business nonprofit community stakeholders reassociate is a busy guy and we have more information about him at all the speakers in the packet, so i will not belabor my introductions. i am divided to welcome onto the podium. please join me in welcoming don. [applause] >> thank you so much, maureen

and aspen for inviting me. it is absolutely a pleasure to be here to join this panel and talk about something that is critically important for the country. the president believes that we need to focus full force on ways that we can make sure that all people in our communities have the opportunity to succeed particularly those who are the most vulnerable and very low income residents of our community. one of the things i do in my job without treasury and other white house is try to find ways that we can support a whole range of folks as they create jobs and help to grow the economy and help the country more competitive. and the work that the aspen institute has done at the aspen institute is so important because it's helping to show that there are mechanisms that

we can support micro- enterprises as they grow as connie says to me all the time you will hear in a minute one of three is the tagline she talks about. so, if one in three -- and i'm going to mangle this, but one in a three -- one out of every three mike enterprises in this country and avoid one additional person, we would be at full employment. so i think it goes to say that it's really important for us as a nation and particularly those of us that work on policy to think about ways that we can support growth, micro- enterprises because that will help us get to a place where we as a country are war competitive and we can get our communities more stable and growing. as you all know, the president has spent a lot of time focusing on ways to support small businesses.

he has passed a lot of legislation with the help of congress, h he's implemented new programs, and it's because we recognize that micro- businesses basically account for 26 million u.s. jobs. that's not a small figure. and with large employers in the recent years, hiring less so many of us would like, it's all the more important that it's self-employed and independent work take a more leading role in our economy. so there is a range of things the presidency and the administration have done to support small businesses and micro- businesses in particular both with direct support through loans and investments and through a range of programs that cost the administration but also interact ways that we support micro- enterprises through regulatory improvements, through supporting mechanisms like grant

programs that cost the government to support local and regional efforts to grow the micro- enterprises. in fact, some of the things you might not have heard about include a one-stop shop. we've known all along, those of us that work with small businesses have known it's very difficult if you are an on-chip into her who wants to find out what resources there are at the government, you can go to one of two or 300 different websites and get that information or you can call around and maybe you will get the information that you're looking for. the president heard that loud and clear and said we need a one-stop shop for businesses for an entrepreneur who wants to get a certain piece of information or learn about the range of support mechanisms area that's why the president created a business dot usa .gov. it's a one-stop shop that provides access to that information in a way that business owners can use it to grow their business rather than

wasting time trying to track down information to go to thousands of different links on a website. similarly, the president has sought to streamline regulations that are hampering small businesses. we know that this is an issue for businesses that the local level and at the state level while it was also a problem at the federal level. so, the president signed several executive actions to reduce the amount of regulatory burdens on small businesses and asked all of the agencies to look at those regulatory rules that were in place that were hampering the businesses from being able to succeed. so the agencies went back and looked at all the rules on the books and found in many cases that they could either waved or tweak their rules to make it easier for the businesses to engage in the work that they need to do creating products and

providing services and not having to get hamburger and red tape. so that's just one of many different things that we've been doing to help small businesses. at treasury, we spend a lot of time thinking about access to credit. we know that access to credit is a huge issue for micro- enterprises for small business businesses, but the micro- businesses in particular. that's why the president signed into law the small business drawbacks of 2010. there are a whole range of components of the program that sba has implemented. at the treasury, we have three different pieces of that legislation. one with a small-business lending fund. this is a program that invested $4 billion in community banks. they do the lion share or outside portion of the share of the lending to small and micro

businesses because of the 4 billion-dollar investment in a 332 institutions across the country -- an indication banks and funds for community development loan fund -- we are seeing positive returns for the taxpayer so this is no cost to the taxpayer. and we are also seeing that lending has increased by more than $10 billion. so you take that $4 billion as a result, the institutions have loaned more than $10 million above and beyond the lending that they were doing before hand. but that actually turns into around 41,000 new jobs -- new loans to small businesses. it also means that of those loans, i think we are somewhere around 6 65 or 70% of those loas were below $100,000. so these are actually loans that are going to the smallest of the

business is not criticized but getting to the businesses that are going to be the job creators and are the job creators. we also invested through another program called the state small business credit initiative. $1.5 billion went to states to support their innovative lending and investment programs all across the country. that's $1.5 billion we expect will lead to $15 billion worth of new lending across the country. to date, if supported around 5,000 new loans and 80% of those loans through the program went to businesses with zero to ten employees. so again these are affecting the smallest businesses in the country. the program supports a range -- this program supports a range of state programs. i think there are about 142 different programs across the country but it's the most innovative and successful program that it's supporting. capital access programs, the

lateral support, loan participation in the range of micro- enterprise programs in fact as maureen mentioned i spend a lot of time and each right. just two weeks ago the state of michigan using this ssbci funding with huntington bank is a 25 million-dollar micro- enterprise program focused on detroit. so we are excited that these funds are actually getting to support micro- enterprises. in addition to that, we have this great part of the treasury. i think of it as the retail part of treasury. the community development financial institutions fund or cd fia. this program supports low and very low income communities all across the country. many of you have probably heard of the new market tax program and the work is done over the last decade and a half. $33 billion worth of tax credits

going to the lowest income communities in the country. in addition to that, we are providing hundreds of millions of dollars of grants to the local cd fia that are the ones working closely with micro- enterprises. so i'm not going to spend more time touting all of the things that we have done, no doubt many of you know these programs yourselves. i will say that what i am the most excited about is some of the things we have been working on recently. so start of america is something the president helped launch a few years ago which is mobilizing billions of dollars of business resources to help launch hundreds of thousands of startups all across the country and now that there are local startups collaborated that are part of start up america partnership of across the country. i think it was just about a year and a half ago the president

signed into law something he had been promoting for a while which is the jumpstart our business start up act. one provision of that we think is a game changer in the democratization of capital for small businesses. that's proud funding. many of you know about crowd sourcing and likely heard of the crowd funding. was it two weeks ago, three weeks ago the fcc actually put out its proposed rules on crowd funding. if you've not taken the time to look u at the rules i encourage you to do so. give them your comments. i think the comment period closes in the middle part of february. crowd funding has the ability to get support from a crowd from friends, neighbors, folks in the community to help the micro- enterprises take their great idea and hire an additional person to get the type of investments that i think they

had once been the was only eligible for folks who lived and worked in wall street or in boston or silicon valley. now we can go out to the heart of the country and find ways to help support small enterprises with folks who live in their community, folks who belief in those small businesses that prior to this day didn't have a way of investing in those businesses. so, all of that is to say that we are very focused on what we can do to support the micro- enterprise in this country. we think it is critically important as i said to help grow more businesses and help to employ them are people so we can get the country to a place where we are all realizing the dream that each of us has. with that i want to thank aspen for hosting this event and i think the panel is going to be really interesting and i look forward to hearing from you and working with you and meeting you all at some point.

thank you all so much. [applause] thank you, don. i was right he is a busy guy, right? i really want to thank you again for your leadership in energy and all you are doing to really promote micro- enterprise and build the field and opportunities for americans. let's thank don again. [applause] now it is my pleasure to quickly introduce the panel. we have a really terrific panel for you again. we have materials for use in line just going to try to quickly help you match up names and faces in case you don't know everybody. next to me as my colleague joyce klein here at the aspen institute and she will be moderating the panel today. and to her right and you're left if i'm getting this correct is

elaine edgcomb who was the leader of the field for so many years and is now our strategic advisor and we are happy to have her back with us today. next, we have ida rademacher for the economic development. next, elizabeth kregor, director for justice and entrepreneurship and lecturer on law at the university of chicago. and next we have connie evans the president and ceo of the association for enterprise opportunity and certainly last but not least we have suzanne mcfarland from city solutions and applied research at the national league of cities. so thank you all so much for being here with us today that i'm going to turn it over to joyce to get the conversation started. i would like to welcome everyone again. i work in the economic opportunities program and i run the field program that focuses

specifically on the micro- enterprise here in the united states i'm really excited to be her for the conversation today into the speaking with our panelists who bring information and experience to the conversation that we are going to have today. i also want to acknowledge that we timed i this out really well because saturday november 30 is small business saturday. so you can think less about black friday, go out and spend your money but also remember you should spend your money on small businesses as well. our goal was to touch on three issues today. why, what and how. the first thing we want to talk about is why. so if in the united states we are concerned about creating jobs on an command particularly concerned about creating jobs for low income individuals and communities that have the greatest challenges connecting to our economy why is it that we might want to focus on micro- enterprise development as the key source of those drops. that's why.

second, we want to talk about what it is we can do to better support the micro- enterprise development. and maureen mentioned that we are building off of papers that were offered as part of the big idea for job series created by the casey foundation. what they really wanted to do is look at the job creation challenge facing the country and look at policy ideas that were both feasible and scalable so that we are about today. feasible and scalable policy ideas that might be ways to separate micro- enterprise in the country. finally, how. we also wanted to get into not only what were those policy ideas but how can we move forward in terms of advancing those. some of these ideas are not that new. they've been a around for a while but hell do we get a scaled up in the united states so those are the three things that we want to talk about and it is a lot to cover. we have a big panel because we wanted to have the offers --

authors yet we are going to jump right into the conversation. so, i thought it would be useful to start with a definition of micro- enterprise. for those of you that are not that familiar with it. and i think that this is a pretty widely accepted definition in the united states but we just wanted businesses with five or fewer employees -- excuse me, including the owner. and typically, businesses that require 50,000 or less in financing. so, if you think about how we define small businesses in the u.s. and if you look at the sba website you'll defined it in different ways depending what sector you are in that it encompasses businesses that may have as many as 500 or a thousand employees and for many of them it can involve a business that has 35 or $50 million but what we are talking about for micro- business is the smallest set of businesses with zero to five

employees. you may be found here with micro- enterprise and that in the context often what folks are targeting is small businesses that may require just a few hundred dollars in financing. and while some of those businesses that we are focusing on here as well we want to paint a picture for duty are talking about businesses that can employ several people and really be full-time businesses for folks. in terms of logistics, the format is going to be a set of questions to the panelists to try to get some ideas on the table and hopefully we will keep the conversation rolling and then what we want to do is leave time to have some questions for those of you that are in the audience. for those of you that are on social media, our twitter handle we have a hash tag for the event which is discussed micro jobs.

i know we have some folks joining by lifestream and c-span so for those of us watching virtually if you want to ask questions we will follow that and maybe we will be able to get those in the q-and-a. i will ask those of you that are with us today in person, feel free to tweak the turn your phone on silent. with that we are good to jump into the conversation. elaine we have been doing research for about two decades and focusing specifically on the network of the community-based organizations that work to support the entrepreneurs in the united states so can you start by painting a picture of what these micro- businesses look like based on your research and what the organizations that work with them are like? >> thanks for asking that question. i think the definition that out at the top was a helpful one to think about it quantitatively. but when you think about what these businesses really are i'd like to think about them as

businesses that make our communities livable and in many ways delightful. without those businesses we don't have the communities. there are street vendors and shopkeepers, they are bookkeepers, the ones that clean our houses from our offices, they are daycare providers, they are the people who make crafts and artisan products, they are the people who take food and transform it into wonderful specialty foods and restaurant owners. all of those kind of people that make our communities livable and the faithful are micro- entrepreneurs. across the u.s. there's over 800 nonprofit institutions that are providing services to entrepreneurs like that to help them start and grow their businesses into those institutions some of them to micro- enterprise development, that's the sole thing they do and others do that as part of a other set of services they offer to their community development

financial institutions, educational institutions, community-based organizations, and they all provide services that entrepreneurs need. about 45% provide loans and capital access and the other 55 or so lead with training and technical assistance services for those entrepreneurs and they will serve a wide variety that i just described. but in particular they focus on those that are disadvantaged that have fewer mechanisms for accessing capital or business services. so they reach out to those who are largely winning. i think the last consensus indicated that 58 i think percentage were women. they are a minority, low-income, i would think about 70% were low to moderate income and over 45% of them were actually working for folks whose household incomes were at 150% or below

the federal poverty guideline. so those are the kind of people that we are talking about today. >> that is sort of the research picture. now let's turn to death and you work in a law clinic that works with low-income entrepreneurs. we are going to get to the policy bu determinations in a second because you are in these issues all the time but i want to start right having you describe for us one of the entrepreneurs he worked with in your clinic and maybe get a flavor of some of the challenges he worked with them on. >> absolutely. joyce mentioned by the director of a legal clinic that provides assistance and advocacy for low-income entrepreneurs. and as it was mentioned, some of these big ideas are not new and our big idea is as old as the country. it is that each american has the fundamental righ rights right tg dream and start a small business. one of the many entrepreneurs

that i've met over the years, i've been working in the clinic is manny hernandez, and she is someone who works with some of the best restaurants in town thabutas the economy started ton down, he lost his job. instead of lamenting, he took it as an opportunity to start his own business for himself and for more people. in chicago unfortunately it is illegal to sell food from a food cart, so unless you are selling ice cream. so, the most affordable way for him to start a business, the most affordable way for him to test the market and get out into some of the local neighborhoods with his culinary creations was close to him. he did start a food truck called the tamale spaceship and he and his cofounders loved it.

they serve excellent tamales wearing wrestling masks which i think were probably very hot. but really fun. they certainly make the neighborhood of delightful. he went from unemployed to being an employee or a five. i guess that just takes hi themt of the definition of the micro- enterprise because with himself there were six. he had created these jobs, but fortunately the city of chicago says a food truck can't be within 200 feet of a restaurant. and you can't be downtown or in any of the neighborhoods where there is a lot of foot traffic which is good for a food truck if you are for 200 feet from any restaurant. so this was a serious challenge and a burden for this spaceship and all the other food trucks in the city. when efforts were made to explain to the city how important the opportunity to start a food truck was for these beginning entrepreneurs, the

city did write some new laws but unfortunately they tightened the screws on food truck. the fees for parking close to a restaurant went from 250 to $500 to 1,000 to $2,000, four times the fee for an actual poll for violation. so this anti-competitive wall that was in place only to protect the restaurant into making life extremely difficult for the entrepreneurs like manny who are starting their vb businesses and hoping to grow those businesses into the next years or decades a restaurant. so that is a flavor of what we are talking about. i'm going to turn it over to connie now because one of the issues that comes up i think for those of us like you the voice of micro- business and the programs in the u.s. when you talk to policymakers on this question of whether these are micro- businesses like how valid

a stretch of the days, how big is this in our country and is it really worth focusing on these businesses when one thinks about job creation? so you did some research and looked at the issue of how the businesses create that. can you give us a couple of highlights from that? >> thank you. the report is called bigger than you think. at the economic impact of the micro- business in the u.s. command that study was started by the kellogg foundation with the enormous impact that is made by micro- businesses. first, 92% of all of the businesses in this country are micro. 98% of all effort in american owned businesses are micro- and nearly 96% of all hispanic businesses in this country are micro. so we are talking about the majority of businesses in this

country. overall and in the aggregate, these businesses create or help to create more than 41 million jobs. again, that is directly and interactively i inside job effet from the micro- businesses. 41 million jobs which is nearly 30% or 31% of all for job creation in this country. and so we think it's very important to bring the data, the contribution of the outside contribution made by the micro- businesses really as your example shows can become an economic lifeline for individuals and their community for women we found in the data women who are using micro- business as a strategy are able on average to generate between eight to $13,000 more income

than those who are not in a micro- business. we found also that it has a particular satisfying and productive effect on wealth creation? sample micro- business owners are two and a half times -- have 2.5 times more wealth than the non- business owners. for a latino man, the difference is five times in for an african-american woman, the difference in owning a business, a micro- business in particular is ten times the creation and otherwise. so we think these effects really do become game changers for individuals and communities who are undeserved. we talk about underserved because of their lack of starting wealth the products and services that are needed to sit

in a particular unique set of circumstances and help their businesses to start and grow either are not available or they are just not accessible. and so we think there is a great opportunity looking at this data in the aggregate to change not only part of the policies but to change the idea and our imagination of what we think about when we think of businesses in the community, that they really are micro. >> i like the fact that you brought the wealth question as well as the job question because in the short term our country has a jobs issue but we also have a very important long-term issue with the growing inequality in terms of wealth creation so understanding the effects of the businesses is important. so thank you for raising that. elaine, i wanted to come back to you now. you mentioned above role that micro- enterprise development organizations play in supporting

particularly the most disadvantaged and the folks that have the hardest time accessing resources. and some of your most recent research and in fact the study that the casey foundation funded as a part of the big idea for job series but specifically at the job creation affect to give us a sense of what you learned in that research. >> what we did a is we worked wh 23 micro enterprise development across the country and together collected survey data on close to 1200 entrepreneur clients in the program who were randomly selected from all of the clients that they served in 2009. and we looked at their experience in 2010 and collected the data in 2011 and what we learned was that these disadvantaged entrepreneurs were indeed able to create jobs not only for themselves, but for others in their communities. and we looked at an array of

data points. so for example, we found that in under two years about one year and seven months, the number of jobs supported by these entrepreneurs increased 104%. we found that the owners, two thirds of them were working full-time at their businesses, the employee is one third of them were working full-time, the wages that they were being paid exceeded the federal minimum wage. for the owners of exceeded the federal minimum wage by about 53% and for the workers of exceeded it by 38%. we also found that the owners below the poverty line when they entered the program, 80% of them are above thwere above the poven they were surveyed due in part to the income that was generated from those enterprises. we even found that a very poor people were able to create businesses that employed other people. 36% of the people who came into

programs below the poverty line not only created a business for themselves but generated employment for other people in their communities. there were 1.4 jobs for the other folks per business among the very low income folks in the study. the other thing we learned is that it costs between 52 to $5500 to support the creation of one of these jobs which was a very reasonable amount of money. and we learned that for every dollar invested in the program, $3 were generated into the wages paid to either the workers were the owners themselves and that was in the space of about a year and a half so we project that out we could see that that investment would multiply even much further so those are the kind of data that we were able to find out from bees quantitative surveys. we were not able to peer inside of the employee's household or look at how the employee considered the quality of the

job to what extent it provides a career ladder or opportunity for future development, but coming soon, we will be able to do that. at this moment we are commencing a qualitative study. staff will be interviewing a set of employees. business owners supported in new york, and once those interviews are done hopefully we'll be able to speak to how these employees think about these jobs and what is the role that they play in their households so the quantitative picture looks great and we are looking forward to the quantitative picture. hopefully that gives you a picture of what we are talking about in terms of the jobs created so we are quick to turn out to the policy question, the second question is what. and i'm going to start with ida. advancing the policy ideas that are both feasible and scalable which is no small challenge in

today's policy context. but they did with your paper is what you looked at in trying to keep that scalable to say where the existing systems out there, policy systems and mechanisms that we can better support. the one that you focus on in the papers the tax system to tell us how you think the tax system should be changed or modified to better support for startups and small enterprises. >> it is a great foundation to start sharing some of the things we learned with this research. i think why entrepreneurship, why job creation for most and themselves they put up some oute research looking at 16 years of the trend of job creation and found that 65 to 90% of the job creation came from small businesses between 1995 to

2,000. so thinking about that, most start as sole proprietors. they start at zero and some of them grow a lot and some not so much of i at that point when yoe a proprietor, you have the individual tax code. we talk about income being recorded so there was 23 million that used the filing mechanism. to follow their business earnings we think about 13 million of those were low income folks, so in this leverage to moment to collect with the low-income entrepreneurs it's complex for all of us. it is incredibly complex and difficult to navigate when you

are a very small business that didn't get into the job of the tax code to see the dream fulfilled for yourself and your family. and so, it and counters another side of that when you look at tax time for a self-employed proprietor and the environment is somewhat punitive. the main oversight is used and the gap that happens at tax time is about small businesses, so the culture tends to be looking at the problems of the enforcement rather than trying to figure out if there is a soul proprietorship and before they can even access credit what can we do at the very start to set up for success in the financial capability to navigate the tax code but also in terms of understanding the other kind of

assistance. having said all that quickly, two things to keep in mind. but there is no existing credit refundable or otherwise that exists in the individual income tax code that would target the self-employed business owners and any types of fences. the fact that you can amortize your startup cost or if you make enough to itemize your deductions you can deduct half of social security and medicaid payments. as we see with most tax incentives it is and helpful once a uri up the income bracket. when you are willing to if it doesn't refundable it isn't particularly hopeful. talking about the disincentives and i say that when you think about what opportunities there are there's a couple things. one of the first things we talked about that one of the

biggest breaches in this idea of the refundable tax credit would be the entrepreneur and we took this idea out and it's the idea there would be some refundable credit either limited by the age of your business or limiting the amount. nebraska has a model that we could build on. that would have an opportunity to incentivize if other folks to get over those hurdles and leveraging that do help a lot of small business owners, so even though it's focused on the low-wage workers really i think in 2,007, 6 million individuals who filed reports of some self-employment earnings and a large portion had most of their

income from self-employment. there is a number that comes out of the irs that support assistance in helping low-income individuals navigate the tax system and file their taxes and right now there's a pilot where a small number of those are able to help low-income entrepreneurs with their filing but it's limited in both if you have more than $5,000 of expenses they can't assist you so one thing is to look closely at what can be supportive. we are looking at the pilot and i think making sure they are refundable for the workers are highly leveraged and used as the other opportunity and we can talk about other things later. >> tax time is important from the growth question because what he was a lot of educators will s when they start filing their taxes if they started not

realizing when they want to borrow money later they are not showing revenue a lender would want to land again i very late o help folks build towards that ability to grow. you've done more work looking at the workforce system and how we might think of the micro- enterprise. >> the first was published is up online and of the new one will be coming out in january. we looked at the tax code and in workforce we talked to a lot of experts and thinking about how do you leverage the systems we are looking at ways to upend appointments but one of the things we found is the way the primary funding vehicle for job training the performance are

pretty specific. they measure how long you've are employed and how much you make. if you are trying to assist somebody, none of the ways that you would categorize if that person is successfully employed matchup against performance metric that you rely on to get your funding so the department of labor to figure out how to support alternative measures that count in the workforce investment system because there is guidance out there to support referring people to self-employment and the self identified idea and if the qualifications are there is guidance that would say that you should refer people but it's just incentivized. if you are receiving unemployment insurance rather

than looking for that job if a r state has authorized the self-employment assistance program you can be working on starting your business and receiving your unemployed insurance but such religious right now that complexity into the red tape leading the state be allowed to do that or drawdown the fund is complicated so there is more work to be done. but it's out o out of sight of t happens in the beltway making that stuff happened. >> i should note researchers to self-employment program. >> i want you to speak to two policy ideas you raised in your paper i and these go far to wane state and local level. first is the community development lock grant program and how that can be used and expanded in the development and

the second is capital access. could you speak to both of those? >> community block grant funding is available to municipalities and can be used for a broad variety of purposes. the value of the funds is the flexibility that can be used to support a variety of tools and mechanisms to support economic development and the 26 states have decided to use some of their cdbg funding that may be about 9% of all of the funds available for economic development are being applied. under 1% of all funds that are available are being applied to the micro- enterprise and so there's an opportunity to

support micro which has been demonstrated in a few places but a lot of states haven't taken advantage of doing that. the idea is that those funds can be used by state and localities in a flexible way to support training dollars or technical assistance to deliver services directly to entrepreneurs. they can be applied to loan funds to business owners. they can support the operating expenses of the programs themselves which is often the hardest money to fund so if a state or city is interested in leveraging the power of micro- enterprise job creation, they can use that instrument very flexibly to filling the gaps in the ecosystem in terms of what the programs need and it's really worth thinking about how that's possible to do and i

would just put that out there to think about how some of the resources can be shifted to support more of the job creation at the micro level. the capital access program or programs that enable lenders to mitigate the risk of loans they make to small businesses. what happens is a state capital access program creates a reserve fund to which the state, the lender and the borrower contribute a portion of the reserve that is required against a specific loan and then the money is held in the reserve account and if there is a reserve that can be drawn upon to replace those lost funds so what is the value for the micro- program? the micro- program then to entrepreneurs who wouldn't be led to by the formal financial system so the more we can get up to entrepreneurs, the more

potential we have with job creation and our research shows that the borrowers are more likely to create jobs than the non- borrowers because the businesses were at a point they were ready to grow to getting more money in the hands of the microbe on the word can kickstart for job creation so by creating these reserve fund is committed to mitigate the risk for all parties, the borrower, the lender and it reduces the obligation of the state as well in terms of what funding and might neeitmight need to suppore lending which allows the program and to amplify what it's doing. in effect it bubbles or triples the reserve fund thereby allowing them to expand into the market where there is risk. colorado, north carolina, georgia and california i think are the only states that use the capital access funds for micro-

enterprise. there are 26 or 27 states that have these programs that they can find them to the financial institutions, to banks lending to small businesses. the states i mentioned open it up to micro- lenders which provides a powerful tool. in the state of california it has meant opportunity funds in the area come economic development corp. in los angeles, san diego and a number of lenders in between have all had access to these funds under the capital access program. in 20,111,940,000 loans were able to be made across the whole system because of allowing that access to that program. and the lawsuits hav if lawsuity limited and modest. in that year it was under 10% so by diversifying the risk it will cost all three parties and by allowing the lenders to expand the capacity is a powerful tool.

>> there is an opportunity there because one of the programs mentioned from the small business initiative has got money into the capital access programs are finding ways to open up to micro- enterprise can be useful to read we have former set of ideas to bring up and then going to tend to be too particularly connie has experience working with them on the ground so i'm going to ask you to speak a little bit about your focus specifically on the issue of local licensing and how that affects micro- enterprises and tell us about the barriers you see and recommendations he made in your paper about how to deal with them. >> state and local governments far too often get in the way of these micro- businesses and job creation rather than clearing the path for the entrepreneurs to be creative and two brand-new things so the local licensing requirement orequirements of thd city level creates these small boxes that these entrepreneurs

often have to fit into what they create all sorts of barriers for people, so for example the problems created in the licensing requirements are listed in my paper and they include unnecessary training requirements. ..

already in existence, and makes permanent the business model of the businesses that are in existence who don't want the competition, so these laws require certain kind of facilities which are waste of money. we want these entrepreneurs to spend their money come we're asking them to spend money on facilities. classic example, funeral homes for anyone involved in the funeral business around the country may be required to have full funeral home embalming rooms and everything. these representatives, simply want to build a wooden casket but were not allowed to because they didn't have a full on funeral home, licensed funeral director. thirdly, these laws create these very narrow categories that

people have to take into. a fantastic example of a brand-new business that is using technologies to improve transportation. but it's running into these problems in every city ventured because they are very rigid definitions of what the basis can be. what is a taxicab business, what is a deliberate or black car business lacks the verse ran the idea bars the lines between categories and, therefore, some cities prohibit uber from operating altogether. it's a great loss to the cities. and a great demonstration of how the influence of these businesses on these laws, when uber comes in and challenges to laws that define what you have to have an what a black car is, it's a taxicab companies and the delivery companies who have long

held in those city council to fight uber back and make it impossible for uber to bring something new to the customers. that brings me to the last category, unnecessary, inappropriate and really damaging licensing regulations which are just purely anticompetitive. gamy kind of cap on number of businesses that are allowed, a cap on the number of taxi cabs or a requirement, like i mentioned, for food trucks, that may be far away from their competitors is simply preventing entrepreneurs from doing what entrepreneurs do best, which is innovating, bringing new ideas in the economy, challenge the folks who are all ready out there and to bring new and exciting services to their customers, but also new and exciting jobs for their neighbors. >> so thank you, beth. one of the things you point out

which we didn't get to in the macro question is the issue, that's worth recognizing, which is the whole issue of independent work and self employment, ma what we see as a growing labor market and. that's another reason to think about these policies. there's positives as well as negatives with the fact that the growing trend. will do a whole form on that someday. but to some extent it's going to be a labor market trend, so be think about how to respond to the. so let's get into the real tough question which is how do we move these ideas forward. i've got my to -- thank you for being patient. we're going to queue up now. christie, i'm going to start with you. you've been working on a bunch of these issues at the national league of cities. the local ones. i wanted to start asking sort of a big it should question, which is if you think about what's going on in cities right now, where on their list is the issue of job creation as an important

issue? me think about job creation, do they think about these micro-businesses? that's a great question, and the answer is yes. job creation is still right up there. we've done a number of different types of surveys and interviews with city officials from across the country. thinking about things like service provision, finances and job creation is sort of the big three we are seeing. i think traditionally when we think about job creation, economic development and cities in terms of policies they employed to get there, we typically think about economic attraction which is how do cities will attract bigger businesses and companies to their communities. we know for our city work that still an important mode of a lot of economic develop strategies. they are thinking about economic attraction in different ways, which again could be a whole separate forum but i think a more strategic ways. they are also looking towards a much more balanced economic

development approach, which includes small business and micro-enterprise development. we know that looking to 2013 and 2014 to cities across the country really are looking to that of investment they're making in those types of programs in their community. specifically i think it's interesting when we think about small business development and micro-enterprise development, by and large its regular business development, how do you make your community more business friendly in the sense we're not looking at tax policy specifically. not looking at again how to attract larger businesses but how do you make the local government itself more friendly to and compatible with the businesses that potentially can be in the community, growing from within the community and really just wanted to be in the committee, potentially at the microenterprise as we talked about, seeing those businesses that degrade the quality of life in communities but also there are other enterprises that have different growth aspirations to

be the next larger bases in your committee. there's lots of reasons why local governments certainly are looking to a more balanced economic development approach. when they a think about what small business development means, what microenterprise development means, it really is how do you increase communication with these businesses come and particularly when we talk about micro-enterprises that may be in lower income neighborhoods or may potentially about immigrant committees as well. how do you create services, create those services and promote and communicate those services in a way that is linguistically and culturally relevant to these communities as well. >> one of the issues you've been working on at national league of cities is the issue of how to business licensing regulations get in the way and how do they constrain microenterprise. and particularly to begin with food trucks.

can you talk about the work you've been doing and maybe give us some ideas of places, cities where there's a lot of interesting work going -- going on and what some of the challenges have been? >> sure. i think you raise a lot of interesting points and i would agree with most of those. and i think when we are thinking about licensing, particularly at the city level permits, there's always a reason why a license is there to begin with but over time in less you take an inventory case stock, think about why those licenses and permits are there to begin with, it gets kind of layered on, layered on until the actual impact is stymieing job creation in the development in the committee. there are lots of places that have been experiencing growth in food trucks more recently. it's an emerging industry that really is growing up a more quicker than city regulations and like permits can keep up

with. it's also an area of the economy than many cities see as holding a lot of promise broad ownership, particularly for micro-enterprises. what we are seeing at the city level is that communities are dealing with issues related to public health, public safety, all these other critical factors. but really looking at licensing and permitting as sort of a key impediment to helping support these businesses. so how do cities take an inventory a 10th of what permits they have in place? what are the impacts of those and what we found by and large is that even the cities that have been proactive in terms of taking inventory of what those permits are, they're still about three to five permits, three to five departments that are required and this is on the

positive scale, three to five departments that need to be visited by the business themselves. although some of that may not necessarily be able to be increased beyond the 35 permits they need to be visited. we know that cities are also looking at the cost of the permits as well. and you take a place like austin for example, which probably is well-knowwell known to many as g the food truck industry. they have a very comprehensive website, for example, that really lifts out and specifies all the information that anyone who's interested in starting a food truck really needs to know. printable forms, easy access to information, and begin they have found that sell. in cincinnati for example, public health is always going to be the key when it comes to food trucks in terms of regulations and permits, what they'll be most concerned with.

so they've created one stop shop for food trucks through the public health department. these are various ways that cities really are looking to supporting the food trucks in their community. >> sound good, beth? >> some. [laughter] >> we're making some progress. i'm going to jump to gone and come back to talk with christie. connie, focus on the national level and one of the things you worked on in the past is the issue of the workforce investment act and trying to do with the issue that ida talk about. talk is about what you did and how that went and what you see as the continuing issues. >> certainly. i think part of what we've tried to do working with our state associations across the country is to really get the state level workforce investment boards to understand the value of

micro-business and its role in job creation. as you've already heard, the barriers are in the actual policy in terms of how organizations are allowed to certify a placement what they call a placement, so they can be funded. we have actually run some of our members have created these island organizations, pilot sites throughout the country that use workforce investment funds. so we've actually been able to give a formula and provide alternatives, and what could be used. i think the problem has combat the department of labor oftentimes just doesn't recognize entrepreneurship as job creation. business development, they've actually said to me, that's not

creating. that's not the same as creating a job when you create a business. so we have a real disconnect in terms of what job creation really is, how it's formulated, and that these businesses, when you start a business, yes, you have created a job. so we are continuing to work to try to get changes, written changes, if we ever get we authorize because it still hasn't been. we have legislators who are ready to add new language toward that bill. so that it could change automatically in the regulation. in 2010, we were instrumental in getting the administrator for the entrepreneurship training component at the department of labor issued a guidance letter to all the state organizations, all the workforce investment

boards around the country, actually telling them in writing that it was okay to use entrepreneurship training, that they actually should encourage the local level to do so. and that still didn't happen. we believe that not only will we just need to mobilize more individuals, more institutions, just mobilize in terms of making a stronger case to make this change happen. and we probably need to necessarily get the regulation change. we think there are all kinds of opportunities through pilots, to keep doing it, but if we want scalable permanent change we really have to focus on the federal legislation and urge reauthorization and passage of some of the amendments that have been actually authored and presented for this bill.

>> were getting a little caught up in this problem we have in washington which is not much is moving. although we are starting to demonstrate energy. >> we vetted energy. we've had new legislators are displayed in an come on board. so it's gaining interest, but still we have the other kind of broader issues on the hill in terms of actually getting that reauthorization. but it is gaining more acceptance. i think there's more work actually to do. i think that legislation will happen before we get labor department to address 21st century kinds of rules that really support, you know, what labor looks like now. we don't have necessarily the world we need. and we don't have the rules and the laws to support, protect, or even count jobs in this country. some of the work created by

michael business owners isn't even counted as a job. so there's a whole trajectory of activity that needs to take place in terms of convincing department of labor that it needs to modernize and create more rational framework for today's 21st century worker, including those who are self-employed and owners of businesses. >> thank you. i'm going to go back to the state and local. we talked about the federally authorized funding program that really the decisions and the choice about how to allocate that money happened at the state and local of a. christie, cdbg is a program that is near and dear to the hearts of local elected officials. can you talk a little bit about what you see as the opportunities and maybe the issues there in terms of mobilizing -- elaine talked about how it's a relatively small amount of those resources that go to microenterprise development so can you talk

about what some challenges might be in terms of increasing the percentage? >> sure. i mean, we know with the downturn, cities really were able to justify the use of city funding for job creation and economic element purposes, particularly to supporting small businesses in struggling neighborhoods. packets to a heart of the reason why we have cdbg in this country. particularly i think as elaine mentioned, seed funding for cdfi's, low struggling to low-income business owners, really helping to increase the quality of life in communities and supporting small businesses. and again, a lot of times, again, microenterprise to the extent that it's a direct goal for the local government within the economic development, cdbg has been an excellent tool. so thinking about challenges, there's always a threat to cdbg funding to local communities. it's particularly an environment

of increasing the amount of competitive grants to cities versus these flexible funding through formulas like a cdbg. so all cities about 50,000 in population receive cdbg funding regardless of need. i think that in and of itself sort of puts a challenge on the local governments to really make the case wide cdbg funding is so critical to their communities. so although this flexibility is fantastic in getting the funding directly to local communities, is really what we want at the national league of cities of course and continue across country looking for. that flexibility in and of itself also creates challenges for thinking about cdbg funding going forward. because there's a lot of -- in terms of thinking about the types of programs, they are extremely broad, again ranging from economic element, neighborhood developing, there's types of programs that are

allowable under this program make it difficult to collect the data that's necessary to measure the performance and the impact of the funding and the programs in the committee. i think that gets at a particular challenge for justifying the continuation of cdbg funding to local communities. on the flipside of that i think there are ways that cities can think about cdbg funding and being able to measure the performance, the impact of those funds but i think that will be a critical component going forwa forward. this links directly to a program through the aspen institute, the microtrack or. just one example, one example is the city of seattle is partnering with state borders and community-based organizations to offer microenterprise training. specifically to immigrant micro enterprises in the community. they've had a lot of success through their six-week business

development program and trainings, and what they are finding is that these programs actually are having success. they are making an impact. the survival rate of the businesses that go through this program are much higher than the national average. the only way they're able to justify that and understand that is through the use of the specific program that their parting with the aspen institute to implement. that allows them to click the data on the performance and have a contact with the micro enterprises to be able to assess the impact of the program and funding itself is making in the committee spent part of that is understanding the clear guideline, one of the ways they get measured. >> absolutely. that program in seattle, it was started in 2010 with a one time $150,000 program through cdbg, and continuing $75,000 in 2011 and 2012.

>> tiny, you'd mention he's run a program in chicago that you are 20 years of cdbg funding that was really a core of what supported your work. >> it was very important to again, we were the only organization to have it, but it really did go to support michael business development and organization captive for 20 years in existence. >> so the the importance of that flexibility as elaine mentioned something you can lie on at the local level if you can make that case. i want to come back and talk a little bit about a lot of advocacy at the federal level. you support the state microenterprise associations. just thinking more broadly and when you think about leveraging these different policy systems and policy ideas, how much of the problem is specific to the policy and how much is just this greater lack of understanding and lack of really thinking about what the role of micro-business is? >> excellent question. i really think it's the latter. it's the lack of understanding

but it really is the reason we've invested so much time and talent and resources into the research. the research that aspen does is important because it digs into what the organization are doing. but what we need to understand on the larger scale again since 92% of these business are micro in the country, you just need to increase the understanding of micro-business. and so what we found talking this date in particular is that once they understand these businesses and who you're talking about and they recognize that, oh, my brother has a micro-business. they never thought of that before. they begin to pay attention. they begin to understand that one size does not fit all, because they believe right now that they really are, as you talked about, they really are providing policies and programs to support small business. the problem is they don't

recognize the nuance across the small businesses. and so there are many policies, as we've heard, that really into fear and are barriers to micro-businesses because of their particular size. we found, for example, in oregon, we are working with our state michael business association and the governor, first lady of foregone, has a program where she's actually incorporated micro-businesses as part of their prosperity programs. it's a program focus on poverty alleviation come all the because of the understanding that she gained actually looking at it. so once government or an individual in government developed a better understanding, once they have data, we found that there is a more willingness to actually start working and thinking about the types of programs that could

help. we see in chicago, for example, that there's a city program that has begun to put more emphasis on micro-business and trying to expand micro-business and microlending. we've been asked by other cities to come and talk about and help them understand new ways of thinking about what they could do around michael business. so we think just having the understanding, one of my favorite mayors in the country, i'd use this quote all the time, i won't say which one it is, but you may recognize this. he's not local. he says in god we trust. everybody else, bring data. [laughter] i think it's the case. we have to continuously bring the data so that we get a better understanding of the characteristics of these businesses. in the report i mentioned earlier, bigger than you think, we've been able to create a

typology that describes five different types of business owners of micro-business, and we think based on their type of self-employment, their characteristics of income and revenue and others, we are beginning to understand a lot more about these businesses and their unique challenges and needs, and what it will take for them to succeed. we also note that even the secretary of the treasury here has talked about and said 8000 bank loans are declined every day in this country to small business owners. and so if you want to change that, we really do have to look at capital access pro grams and the kind of challenges to use those programs, whether they are banks or cdfi, they're just capacity issues, a number of issues that are preventing these things something useful. we have to create better

understanding across the board of the businesses and the hurdles related to them being able to be successful. >> great, thank you. do you mind if i open up for questions? i was going to tee up one more question to ida but we had a great conversation. i want to take a bit of time to open up to see the question to him. if not, i'll come back and ask my question. if folks have a question, if you could raise your hand, we will bring you a microphone and we would ask that you identify yourself and your organization, and also since we just a few minutes for questions the key could be brief with a comment or your question. do we have any? great. hang on a second. we will bring you a mic. >> you talk about cdfi's and other institutions making loans to micro-enterprises. our traditional banks doing it? and if not, why not? >> connie, do you want to take that we've? >> again, i just said 8000 loans are declined a day.

we think the real reason is the high cost of lending. whether it's a bank or the cdfi, the cost are unnecessarily too high. so a lot of activity going toward bringing down those costs, whether it's using technology, looking at different kinds of underwriting that bypasses pico scores and brings in more social, using social media and social demographic data, a lot of things around the data and technology that can really begin to change the business model and the underwriting model used by banks and cdfi's similar to cost. most banks will not make a loan nowadays under $250,000. one of the things that we are doing is we formed a micro-capital task force actually out of the work in a forum that don graves and the

secretaries have created. they created that foreign bring in financial and technology companies. and aeo is moving with that integrating a micro-capital task force that looks at policy changes that are needed and regulatory changes that could be implemented to create a real financial market force of $250,000 loans. spin did you want to add something to that? >> a number of years ago, we at the aspen institute did a study trying to understand the market for microloans. and at that point we found banks were going downstream, downstream, downstream, reaching smaller and smaller business owners all the time. this was pre-2008, of course, right? they were using tools of the credit card and enhancement credits going to do that. in 2008 happened, and all of the

sudden, aware of the risks, banks pulled way back up the markets. so what's changed a lot in the last five years is that banks have pulled out of the market they were entering at one point. part of that is because they must be more conservative in the underwriting that they are doing. leaving that market open and available and underserved. and so that's worth micro-lenders have come into play. so the other thing, and just to follow on connie's comment, the average loan of a micro-loan that we track within microenterprise programs across the country last year was about $15,000. ..

>> i work for the institute for justice. so we were talking about different programs through the government and differen the dift things that would help enterprises grow. has everyone worked for individuals would rather invest on their own? a 15,000-dollar bond has there been any sort of organization to try to get individual investors that are in the business already to invest in the micro- enterprise instant? >> d. want to take that? >> quickly. there are a nuer