it's an important thing to try to replicate. now, shifting forward. foreign born entrepreneurs, and i realize immigration is a contentious topic, it's not something that states can address without also working a lot with the federal level. but it's an important thing for championing at the state, local, regional level. foreign born entrepreneurs are representing 30% of all new business owners in the united states. and 25% of the high-tech start-ups, this is most of silicon valley has -- a lot of it has at least one founder who's foreign born. these are companies, there are are some logos on the pre presentation that you know. google, ebay, paypal, yahoo! i spent seven years at stanford. those companies all had founders that were students on our campus, they literally were like

a lot of our other students. there are a lot international students on university campuses. they looked for partners in all cases, they partnered with american students. and so they were immigrant founders partnering with american founders. they needed help, they needed faculty. they needed people to bounce ideas off. they scaled those companies up out of stanford university, yes, they had foreign-born founders but they did a tremendous aumgt for that region, obviously, and they've done a tremendous amount for the world in terms of changing how we all communicate and find information. the foreign born founder segment is something especially at the university -- it ties to the university, there are plenty people that are saying, we need to staple a green card to the back of diplomas or we need an entrepreneurship visa to attract this demographic of people. we really don't want them

leaving our states. we don't want them going back to shanghai or dubai or anywhere else that they would go back to. we need to figure out a way to get these people to stay, to stay anywhere in our states. but don't leave, especially if we've educated you in our universities. we want these people to stay and innovate in the united states. and then the final point is women. and this is really near and dear to my heart. i was an investment banker for jpmorgan, i honestly believe that women are the undervalued asset class, that means women can be entrepreneurs and we don't see them right now very much in this segment, especially not in the high growth segment. and that's a real question mark. there's some statistics that i think are in some ways troubling and in some ways cool. women are 46% of the workforce,

50% of college students. 51% of our ph.d.s and last year, 70% of the valedictorians. like girls are smart. and so -- for those you who have not figured that out yet. why do we not see them starting up companies? i'll be honest and say, it's really hard to find examples of companies that have scaled over 100 million in revenue in less than five years that have women as founders. and in -- i can give you a couple exams, stella and dot is a phenomenal company, a woman out of stanford undergrad, she started weddingchannel.com and now she's starting a jewelry business. rapid growth businesses in both cases, there's another example called the gilt group, it's a fashion online flash sale luxury group. they may be in industries that you think of as girlie industries, but these are unbelievably cracker jack companies that have scaled up.

they're hard to find. and there are a couple reasons, there's some research behind this. why aren't women doing this? access to capital is one thing. if women had equal access to capital as men, that they would create 6 million jobs in less than 5 years. that should get our attention. 6 million jobs in less than 5 years. 2 million jobs in the first year alone, and so question mark, let's get some capital to these women. another reason the university of wisconsin has done some republican, women can work 15 years in an industry and not think they're ready to start a company on their own. and so some that is just women need to get out and change the perception of what they can do. another piece of research is the networks piece. which is, they don't have access to mentors and advisers, and that becomes the real importance of accelerators.

for governors or for states, there's some things that you can do, can you get more visibility to women entrepreneurs, can you try to put them on science and technology boards. that's a great way to expand networks. where there are examples, you request champion them, because seeing role models that are women that are are high growth entrepreneurs, that does a lot to get other women to go out and do the same thing. so those are some ideas to get that going. places, largely university based innovation hubs, and there are three recommendations here, i'm going to speed up a little bit. tech transfer offices, this is the crazy scientist, the mad scientist that stays in the lab. we want to commercialize all this research out of universities. and there are some suggestions on how we might be able to do

that. speeding the commercialization of faculty innovation is important. like right now more than half of nano technology companies have a faculty founder. and this is a growth space. and so i was at a conference recently where all the nano technology faculty were really upset, they have great ideas and they get jammed up, clogged up in this technology transfer office system at their university to commercialize. they can be overtaken, the market can pass them by while the university system is not commercializing their idea. that's tremendously frustrating to the nano tech professors i was talking to. but as governors or leaders of states, you could really encourage universities to adopt a standardized licensing agreement or you could go to a free agency model where faculty could go anywhere to license. there are great innovations

happening, and not getting to the market. another idea is innovation vouchers, here's the coupon lady. other countries are using innovation vouchers. and the idea here, it would be something to try. the idea is a voucher of 5,000 or $7,000, they're not really large amounts of money going to a small or medium sized enterprise. that enterprise being able to cash it in at a university, and that leads to an immediate collaboration between the small growth company and a university faculty member that might help prototype an idea or feasibility test an idea or do some other research of value to small and medium sized companies. so the netherlands innovation voucher program is a really good example of this. and there are phenomenal results. 80% of the r&d investment in

start-ups in the netherlands have come out of this small and medium sized voucher program. 60% of the enterprises say they will continue to do knowledge transfer type business, even when the voucher has expired. if you have a one-year voucher thing, it establishes the relationships between these cross sector partners and they continue to talk together or work together. another idea, i hear it being talked about, realigning the incentives, especially for state universities. could you reallocate some of the budget to reflect economic development goals in the region, and so as leaders of the state, could you encourage universities to try to do research related to industry clusters. could you have technical assistance go toward local companies? and that wouldn't cost anything in terms of increasing a state budget, it would just be an allocation adjustment.

if universities in your state were interested in trying to do more of that kind of thing, maybe they would get a little bit more of a budget directed toward them. clearly metrics are pretty important here on how would you measure that, it could be patents received, licensing income. there would have to be quite a lot of discussion around what would make that fair, or what would even make this a possibility. it's something i hear talked about as an idea for innovation and entrepreneurship ecosystems. finally, talking to the policies, i have three real simple things to think about. one, a one-stop shop to register a new business. lots of entrepreneurs, they're not policy wonks, you talk to these people, they do not like paperwork, they don't like getting troubled with how to register, how long it takes, where to go, who to talk to, it's a different type of person that's starting up a company,

and streamlining this process with an online website or trying to make it a lot easier for people is something that governors and leaders across states could all be getting together to do. i'd like to think it like the turbo tax. if we can have turbo tax, and everyone can do their own taxes now, why is it so hard to register a business? it really doesn't need to be that hard. try to get the back office solution to the states. let's make this a website where people can come and very, very quickly figure out how to register, not only for some of the business things, but it can have add on legal services or patenting services. we should be trying to make this as easy as possible. example here is portugal. portugal does have a firm online

program. i don't think of portugal as being massively efficient. but in this way they've done an amazing thing for registering small businesses, and the results are very, very visible. 60,000 new portuguese companies have registered in less than two years. it's something to think about. it wouldn't be that hard to stand up. a web mentor matching program, as mentioned this morning. mentorship is really key, and this is part of the learning process. entrepreneurs are really on their own. many of them in small teams are trying to figure out how to make things happen. having somebody to call, is having an experienced person who's seen these things before, done these things before, or can just bounce ideas with you back and forth, and try to improve

your thinking before you go out and invest your own money, the mentorship system is really important, and having an online system would facilitate mentorship in your states. you could have executives that are are retired and living in one part of your state, mentor somebody on the complete opposite side of your state. you don't have to live locally right next to somebody to be their mentor. i think this potentially would unlock a lot of value. you would have to bet the start-ups and you would have to bet the mentors, you don't want to waste anybody's time, right? you would have to make sure the start-ups are real deal start-ups and they had experienced people trying to do important work there, and you would have to have experienced mentors, you don't want anyone to sign up and say they're a mentor and get batted by. in would be thinking on that to make it work. i think it's potentially important. and finally, tax policy, this is somewhat inconclusive.

the recommendation here is, we need to study this more. there are lots of different approaches. the entrepreneur -- kaufmann foundation is making the foundation that simplicity on a wide base corporate income tax structure is really the way to go. with that said 41 states offer corporate tax incentive, 49 are using sales tax exemptions on new equipment, it's really complicated, everybody has different ideas about how to make this work. if you're an entrepreneur, you want transparency, you want it to be decluttered and you want to have some visibility what it will look like in the future as well. in order to plan your business. simplicity for entrepreneurs is probably the way to go. >> and then the new paradigm, i'll just close by saying, it's possible to build

entrepreneurial ecosystems, i've seen it really in my own life, i grew up just south of seattle. and seattle was not a this riving place 30 years ago. in fact there, was a sign that went up on i-5 that basically said, would the last person out of seattle please turn out the lights. it's kind of legendary in the pacific northwest, it's when boeing was leaving. between timber and boeing, those were the industries that were really driving seattle. and it was not an easy place necessarily to grow up, there wasn't a huge amount of opportunity or -- it wasn't as much as certainly there is today in seattle. and that's the point. i mean, today has got -- seattle has got microsoft, nordstrom's, starbucks, costco, amazon.com, a huge amount of biotech. it's an unbelievably thriving city. it's a model for what we want to

look like in a global economy. that's happened in the last 30 years, i think that's a pilot, and something to look at, and try to see what can happen in seattle and how can other regions do that. in some cases people will point and say, it has to do with technology, i mean, microsoft is there, microsoft has driven a huge amount of innovation. so has amazon.com. the examples i like to point to in seattle are costco and starbucks. this is not high-tech. this is high skill maybe in terms of apprenticeship skill, and other workforce training programs and like that, but costco is employing right now 150,000 employees. and starbucks has got 140,000 employees, that's a lot of job creation in a nontech environment in seattle. r and so i think it's something to look at. i'll close by saying, i hope the governors will be very entrepreneurial themselves and we'll test some of of these

ideas in the local states. thanks. [ applause ] >> thank you for joining us today. thank you. i kind of thought, what am i going to talk about, i promised my government affairs people that invited me, i would not turn this into a commercial. i have to say with the c-span lights, i am able to see which you used a gillette razor this morning and which you didn't. you know, amy and i are going to talk -- are going to end up talking about a lot of the same things but from a slightly different perspective. i hope that you will find the comments that i make today pragmatic and practical. i want to give you some case studies. the goal, which you can tell me afterward if we've achieved it,

is to give you two or three tips that you can focus on. maybe you can start using on monday. i'm going to start with a quote. and i liked your data, by the way, i like this quote, too. small companies are both the greatest creators of new jobs and the greatest destroyers of jobs. because small companies fail so often. well, our job at procter & gamble, and your job even more so is how can we help these small companies grow and not fail. p&g is really, really committed to helping foster entrepreneurial growth, for a couple reasons. one is, small companies are the source great ideas, innovation, energy. they're also our consumers. the vibrant healthy economy creates more consumers so more consumers can buy tide and gillette.

i'm passionate about this both personally and professionally, because i think the government and businesses can do more to enable entrepreneurial growth than we've done historically. i've been work withing on this for a number of years, more than i care to admit. but my hair was black when i started. i'm going to focus on three key opportunities that i think state governments can do. starting on monday, and you'll see some overlap in terms of the things that you did. one is help university's research institutions be more business friendly. number two, help entrepreneurs and start-ups connect with more potential partners including larger enterprises. because small companies staying small are not going to be sufficient. ween watt them to grow big. and last of the three things i want to talk about today, is how do you help support development of capital funding to foster and support start-ups.

now, all three of these were highlighted, we recently in the greater cincinnati region -- we started a project, our ceo was the co charks and we said, how do we create an entrepreneurial economy in the cincinnati area. well, one of the things we learned is, we didn't know what was going on. we actually went outside and hired mackenzie and company to support us on this effort to help us build a fact base of what was going on. we talked to a lot of entrepreneurs, we talked to a lot of angel investors. it wasn't just what we thought. the greater cincinnati region was kind of like the greater description of the elephant. it depends where you're talking and touching. these helped inform the landscape and lead us to what we needed to do. this is not just about cincinnati, i think it plays out in every city, every state in the country. the areas we, woulded with on

are really in three areas. ideas, people and environment, and capital. and as we go into these, i don't have time to go through all of these today, i have a road map that says where the gaps are within our regionp. but also i suspect each of your states and regions have gaps in different areas, and there were surprises in this. we're only going to focus on the three or four that are highlighted there, and i'm going to get to the seed investment as one of the recommendations later. the first one, it was interesting. we did not compare notes beforehand, did we? making universities research institutions more business friendly. today's reality, it takes too long to build relationships and partnerships with your universities. and my organization we talked to many around the states and also across the globe. there's too much red tape. it's too focused on ip. it's too focused sometimes on metrics of how much licensing revenue. we think that gets in the way.

there's too many other good things, i have to tell you the u.s. is getting beaten by global competition. i have -- from my procter & gamble experience, it's easier to work with a university in the u.k. than it is in the states p.m. and i want to explain a little bit of why that is. they're more competitive, more aggressive, they're more forward thinking. let me talk a little bit about what's working. give us some examples. we have a relationship with durham university, not the one in north carolina. i guess i you should have commented on, i'm a graduated a big ten university. this is the durham that's in the u.k. they've done something fascinating, they formed an institute within their university that brings together the multidisciplines so that when a business engagement occurs, we don't have to go

department by department. they do it for us. we have ended up investing money with that university to do applied research. and you know what, they do the work inside to bring those things together. i'm a business guy. entrepreneurs, they don't have time to go department to department. they have preworked the ip rights, it's simple, it works for us. we don't have to do that work internally. we go to singapore. they include their labs, their national labs, regional labs as part of this collaborative agreement. when we have a need, they can call. we can call them and say, do you have anything in this space? they bring those parties together. technology transfer offices. i have to be careful here, we worked with a lot of them. we much prefer to work with business engagement offices. technology transfer offices in

your universities are largely held accountable for meeting the need of the professor, how much revenue did they generate, that means they want to negotiate and negotiate and negotiate and negotiate. this is about creating businesses. solving needs making connections between the company. whether it's an entrepreneur or a big company and that universi university. the michigan and ohio governor mentioned this, we have statewide agreements with the state university system in those states. the state of ohio, it took us -- it was interesting, one of the members of the administration said, we're going to do this. and i lost a bet because he said, we're going to have it done by may. i bet two years in may. they got it done. it's not far enough. michigan did it in 90 days, okay? we prenegotiated 90% of the

boilerplate that happens. still, there's things that have to happen beyond that. i don't think it web with the far enough, it's further than any other state we've done business with at this point. but it doesn't go far enough, it doesn't have things in it that says, if you create jobs in our state or if this does create jobs, you're going to get preferred licensing rights. we still have to negotiate those kinds things. did i mention that's what we have in the uk and singapore and things like that. this is not about just getting more revenue, it's about more business engagement. i'm very pleased. and as a resident of ohio, and my wife's a resident -- came from michigan, i'm not being critical, i'm saying that's a step in the right direction, it needs to go a lot further. connecting entrepreneur start-ups, including large enterprise. today's reality is, it's hard for start-ups to knock on the right door in big companies or

small companies to represent themselv themselves. i have to tell you, it's hard for big companies to see all that's out there. last year, my department had over 4400 unsolicited ideas come to us. that's from around the globe. i actually know how many entrepreneurs from each of your states have registered in our website. we believe innovation is a democra democracy. we'll take good ideas from wherever they come from, but i don't want to have to see and talk to everyone associated with it. we say no thank you to the vast majority. we also are pinging. we develop networks -- do you have something that could help us with this problem? and we send those out to university networks, alumni networks, science labs, we try to build networks with because we're with looking for solutions to help us accelerate our innovation. what we tend to look for is how

do we make these kinds of connections. and i will tell you we like smart agents. i mentioned the u.k. jump to the second one there. engineering and physical sciences research counsel. this is a government agency. when we have something that we need to solve, we go to ipserv if it's in their area. they have similar departments for the other scientists, we say, do you have something that would solve this kind of surface technology? that organization doesn't say, why don't you go talk to durham, or why don't you go talk to leeds, they go, we'll get back to you. they go off and prequalify three or four different things. does this meet your need? the hit rate is phenomenal. we say, wow, ween watt to work with that university, the university puts in capability, p&g puts in capability, and are you listening?

ipserv puts in money. that's the kind of competition we're facing here in the u.s. and what comes out of that is technology that we have preferred rights to in our fields use, but it also overlaps with that university's educational mission. it's a wonderful recruiting tool, because guess what, when we're working with that university, we're seeing their students. our hiring tends to be preferenced coming out of those places because we have two year three year, three or four years they're interviewing. we also look for smart agents. there's a little company called yet2.com in boston we've been a tiny investor if. when the principles call and say, jeff, this is something you ought to look at, guess what, i look at it. they understand our needs. i want to ask you, does your development organizations, do they know what these

entrepreneur's needs are? i like websites. i like having things posted. it's necessary, it's not sufficient. this smart agent piece is a full contact sport. it's big ten basketball. you've got to understand the needs of the entrepreneur, the needs of the big company, the capabilities that exist, and really make the match between those and help drive it through, it's amy's point in terms of, it -- you have to have one place to call and someone that's going to drive it. the last piece i want to talk about is help development of capital funding sources. today's reality, start-ups can't secure financing. an underfunded entrepreneur is a risk for a big business. we have this great technology, i go, wow, that is pretty good. i might be interested in using that. can you deliver that to our business in europe and latin america and do that within the next 90 days?

of course they can. we need capabilities that come from other places to help this kind of funding. growing a small supplier and partnering to a global one mandates they have to have the capital to grow. much as you would like did, big business, medium businesses can't be the sole banker. i will also tell you, that i think you have a role to play here. capital funding development, governments can help. you shouldn't be the sole banker. you do need to provide incent e incentives so that people can co invest with labs, universities, private seconder. you have to incentivize seed capital. when we did this survey in the greater cincinnati area, one of the surprises we had was our seed capital was overdeveloped relative to the rest of the u.s. there were lots of little seedlings being grown. if they have the yield rate of most start-ups, we don't have enough early stage capital. have you to find ways to