starting about 2008, that changed. and this is worrisome. i mean, as people who lead states, this is really something to pay attention to, because starting around 2008, start-ups are starting smaller and they're staying smaller. and so the big question mark there is what happens if our gdp comes back but we're still 7 million jobs short? what happens if this engine doesn't create the jobs and doesn't create the innovation that we need? so really looking to high-growth start-ups is an important thing to do. as mentioned, i spent the last few years doing research on this segment of population that can scale a business over $is 100 million in revenue in less than five years. and so i can talk real quickly about some of the leadership characteristics that we see in that group. this is the quick aptitudes, the six aptitudes that i see. these people really find the gap. so they are spotting

opportunities that other people don't see. they drive for daylight, which basically is managing speed like a nascar driver. they are orienting towards the horizon all the time, and they're looking for the light. they fly the loop, and that is for observe, orient, decide, and act. that is fast-cycle iteration. it's talked about a whole lot in silicon valley, and it's starting to ripple across the country in other management teams. they fail wisely. and by this, this is not a fear of failure. there's a real different mentality out there. it's about placing small bets. it's about innovating through small, incremental innovations, and the idea is you avoid catastrophic mistakes if you set failure ratios. you may want to fail 5% or 10% of the time in order to know you're pushing the envelope. network minds. this is important especially for people in this room. what i can see across the research set that i've done is that really there are new

solution sets. no one can stay in a silo. you can't be a public sector leader only. you can't be an entrepreneur only. you can't be a scientist only. we'll see networked solution sets. it's a lot more than social networking. this is people getting together and putting their brains together to figure out a new way to solve something. and then the last aptitude i see is about gifting small goods. and this basically is small kindnesses. we now live in a networked world. we are all linked together. and it's little, tiny, small favors can unlock an unbelievably tremendous value for a community. and so i'm happy to talk more about any of those characteristics, but since we're here as policymakers, let's shift to the missing ingredient, which is what do you do to get these high-impact entrepreneurs really going in your states?

people, places, and policies. people. four segments of the population are going to drive the entrepreneurship growth. here they are -- baby goomers, gen y, immigrant or foreign-born entrepreneurs, and women. i love this picture. this is a little bit counterintuitive in that baby boomers are the fastest growing segment of the population to create jobs. so it's not necessarily who you think it is. it's people age 55 to 64 who are really getting out there to start new companies. and the coffman foundation has got a lot of research on this. the average age of a first-time entrepreneur in the united states is 39. that surprises people. and, in fact, it tilts towards a lot more people in the baby boomer age range than you would ever expect. there are 76 million people in that demographic, and they truly are going to redefine retirement. they may not retire. right? and there are reasons for that. some of it is people are living

longer. they're healthy longer. some of it is economics based. maybe they actually need to stay in the workforce. but we're really seeing them drive a lot of innovation and entrepreneurial growth. and as leaders of states, there are certain things to think about here. how do you tap into that population. i mean, they cannot only start companies, they can be angel investors in companies. they certainly can be mentors. they can be advisers. there are certain places where they like to live. making your regions, cities, states attractive to this demographic is important. frim the pacific northwest. and an example is bend, oregon. it's amazing how many people like to retire in bend, oregon. it really is an example of a place that probably could do a lot to engage this enterprising boomer segment. next segment.

gen y. this is a guy giving an elevator pitch. this next generation are really interested in being entrepreneurs. 40% of young adults aged 18 to 24 will say they want to go start a business. 60% of gen y are a serial entrepreneur, already started a company and believe they'll never work for a large company. they're going to create their own job. that's encouraging, i think, for the united states. the question mark here is what will do we do to educate these people to really know how to do that. so it comes right back to the education system. k-12 education and also college programs for entrepreneurship. i can highlight a couple i hear all the time from entrepreneurs that are really working. so at the k-12 level, high schools targeted towards stem education. that is something that i hear

over and over and over talked about as really important and a great preparation. and so there are some examples. north carolina school for science and mathematics. illinois mathematics and science academy. thomas jefferson high school in virginia. and the texas t-stem initiative. those are ones i continue to hear about as really good models for stem education at the k-12 level. another thing that i hear about is project-based learning. and so this is another thing that i know different high schools are experimenting with it. but instead of having teachers teach directly at a class of students, this idea is 12 to 20 students get together and work on a project, they're certainly guided by teachers also there in the classroom, but from an entrepreneurial perspective, entrepreneurs work in groups. right? they work in teams. nobody starts a company completely alone. so it's very different than our current education system. our current education system is testing individuals.

they take individual tests and if they collaborate with anyone, we call it cheating. right? in the entrepreneurial system, you have to collaborate all the time. and the idea is how can you work together and how can you learn together. and so i think that's a really important thing to think about trying to foster at every level of education. another example that i love is first robotics. i'm not sure how many people are familiar with first, but it's an additional sort of outside of the high school -- junior high and high school experience with building a robot. so we were talking about sports, right, and this is the sport dean cayman, the founder, says every human being can go pro. everybody can be a pro athlete at critical thinking. so if you can think about building a robot, it teaches you math, science, engineering, all the things that you really need to be good at for the whole rest of your life. as an example of supplemental

learning, i think first robotics is something every single student should know about in every single state. shifting to the college level, their examples -- it's the same log logic, which is working in groups, working in teams, learning through projects. there are examples at the college level launch pad that the university of miami is doing this in an unbelievable way. so is the syracuse student sand box, and so is stanford-x or start-x at stanford university. they're all programs at the college level that are taking student entrepreneurs and partnering them with angel investors, potentially, alumni entrepreneurs, certainly faculty, other students, cross collaborative. it's not just the business school. i was a stanford mba. it's not just in the stanford business school. this is across the medical school, the law school, the arts academies, the design school. it's really a very interesting

thing to see piloted at the university level. and any university could do this. any community college could do this. it's an important thing to try to replicate. now, shifting forward, foreign-born entrepreneurs. i realize immigration is a little bit of a contentious topic. it's certainly something states can address without 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. so these are companies -- there are some logos on the presentation that you know -- google, ebay, paypal, yahoo! and i will say here, i spent seven years at stanford -- those

companies had founders who were students on our campus and they literally were like all the other students. there are lot of international students on university campuses. the guys that started up these companies weren't any different. 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 to bounce ideas off other people. they needed local angel investors. they scaled those companies out of stanford university. yes, they had foreign-born founder, but they did a tremendous amount for that region. obviously they've done a tremendous amount for the world in terms of changing the way we all communicate and find information. so the foreign-born founder segment is something especially at the university, there are plenty of people saying we need to stap al green card to the back of stem diplomas.

right? 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 shenzhen or dubai or anywhere else that they would go back to. we need to figure out a way -- as in the examples of these companies -- to get these people to stay, stay anywhere to 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 -- on the demographics here is women. and this is really near and dear to my heart. i was an investment banker for jpmorgan. and i honestly believe that women are the undervalued asset class. and that means that 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 are 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 any of you who haven't figured that out yet. right? why do not we not see them starting companies? in my research, 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 yoors that have women as founders. and i can give you a couple examples. stella and dot is a phenomenal company. a woman out of stanford undergraduate business school started weddingchannel.com and is now starting a jewelry business. rapid-growth businesses in both cases. another example is the guilt group, a fashion online luxury

group in new york. they may be in industries you think of as girly industries, but these are unbelievably crackerjack companies that have scaled up. they're hard to find, and there are a couple reasons. there is some research, actually, behind this. why aren't women doing this? access to capital is one thing. babson college has put out a report that says if women had equal access to capital as men that they would create 6 million jobs in less than five years. like, that should get our attention. 6 million jobs in less than five years. 2 million jobs in the first year alone. and so question mark, like, let's gets some capital to these women. right? another reason -- university of wisconsin has done some research on women and self-perceptions. women can work 15 years in an industry and not think they're ready to start a company on their own. and so some of that is women just need to get out and change the self-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. there's a group in silicon valley championing women entrepreneurs in particular. but for governors or for states, there are some things that you can do. you can get more visibility to women entrepreneurs. you can try to put them on science and technology boards. that's a real great way to expand networks. where there are examples, you can champion them, because seeing role models that are women, that does a lot to get other twoim go out and do the same thing. so those are some ideas to try to get that going. now, places. shifting to not the people but the places of innovation. 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 actually 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 nanotechnology companies, for example, 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 because they have great ideas and they get sort of 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 us from interest ratesing to the nanotech professors i was talking to, for example. but as goff nofrs or leaders of states, you can really encourage universities to adopt a stand d standardized licensing agreement for spinouts of companies, for

example, or go to a free agency model where faculty could go anywhere to license. those are certainly ideas, because there are great innovations happening and not getting to the market. another idea is innovation vouchers. here's the coupon lady. other countries, particularly european countries, are using innovation vouchers. and the idea here, it would be something to potentially try -- the idea is a voucher of, say, $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 a 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 spram a really good example of this.

and there are phenomenal results. let me tell you a tiny bit about that. the results out of those kinds of programs. 80% of the r&d investment and start-ups in the netherlands have come out of this small- and medium-sized voucher program. 60% of the small- and medium-sized enterprises say they will continue to do knowledge transfer type business, even when the voucher is expired. so if you have a one-year voucher, it establishes the relationships between these cross sector partners, and they continue to talk together and work together. another idea, and this may be controversial but i hear it being talked about, realigning is incentives, especially for state universities. could you reallocate some of the budget to reflect economic development goals in the region. and so, you know, as leaders of the state, could you encourage universities to try to do research related to industry clusters.

could you have technical assistance go towards 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 towards them. now clearly metrics are pretty important here on how would you measure that. so it could be patents received, it could be 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. but it's something that i hear talked about as an idea for innovation and entrepreneurship ecosystems. and then finally, turning to the policies, we talked a little bit about policies, but i have three real simple things to think about. one, a one-stop shop to register a new business. lots of entrepreneurs. entrepreneurs are not policy wonks, right. you talk to these people. they do not like paperwork.

they don't like getting troubled with, you know, how to register and how long it takes and where to go and who to talk to. it's a totally different kind of nearn'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, you know, leaders across states could all be getting together to do. i'd like to think of it like the turbotax. right? if we have turbotax 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. it feels like to me that you could call up intuit and try to get some kind of a back-office solution for the states and tweak it for each individual state and say, okay, 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 maybe it could add on legal services or patenting services or other things that

businesses also need. we should be trying to make this as easy as possible. an example here is portugal. so, portugal does have a firm online program, surprise. i don't necessarily 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. so 60,000 new portuguese companies have registered in less than two years. this thing has been working. it's something to think about. it's something that hopefully wouldn't be that hard to stand up. a web mentor matching program. entrepreneurs are really on their own. entrepreneurs, many of them in their small teams, are trying to figure out how to make things happen. having somebody to call, having an experienced person who has

seen these things before, done these things before, or that can just bounce ideas with you back and forth and try to improve your thinking before you go out and invest your own money or someone else's money, the m mentorship system is important, and having an online mentor system would really help your state. you could have someone on line at one end of the state with someone on the other end of the state. you don't have to live locally right next to somebody to be their mentor. so i think essentially this would be online value. you don't want to waste anybody's time, right? you would have to make sure the startups and that they had experienced people trying to do important work there, and you would have to have experienced mentors. you don't want anyone just signing up saying they're

mentoring and giving bad advice. so there would have to be thinking through on that to make it work, but i think it's potentially important. and finally the tax policy, and the recommendation is we probably need to study this more. there are lots of different approaches. the coffman foundation is making the recommendation that the corporate income tax factor is really the way to go. with that said, across the states, 41 states offer corporate income tax exemptions, 45 offer incentives and 45 offer tax exemptions on new equipment. everybody has different ideas on 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 into what it would look like into the future as well in order to plan your business. the simplicity here 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 and i've seen it really in my own life. i just grew up south of seattle, and seattle was not a thriving place 30 years ago. in fact, there was a sign that went up on i-5 that said basically, would the last person out of seattle please turn out the lights. it was kind of legendary in the pacific northwest because it's when boeing was leaving, and between timber and boeing, those were the industries 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.

we need to look like what we're looking like in a global economy, and that's happened in the last 30 years. i think it's a pilot and it's something to look at to see exactly what will happen in seattle and how can other regions do that? in some cases people will point and say, hey, it has to do with technology. microsoft has driven a huge amount of innovation. so has amazon.com. but the examples i like to point to in seattle are costco and starbuck's. this is not high-tech. this is high skill, maybe, in terms of apprenticeship skill and other work force training programs and like that, but costco is employing right now 150,000 employees. and starbuck's just got 140,000 employees. that's a lot of job creation in a non-tech environment in seattle. and so i think it's just something to point to, something

to look at, and i'll close by saying i hope the governors will be very entrepreneurial themselves and will test some of these ideas in the local states. thanks. [ applause ] >> thank you, governor. as i thought about being here today, i kind of thought, what am i going to talk about? and i promised my government affairs people that invited me that i would not turn this into a commercial. but i have to say with the c-span lights, i am able to see which of you used a gillette razor this morning and which of you didn't. you know, amy and i 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'm going to give you some case studies, and the goal, which you can tell me afterward if we've achieved it, is to actually give you two or three tips that you can focus on that maybe you can actually 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 i think your job even more so, is how can we help these small companies grow and not fail? p and g is really, really committed to helping foster entrepreneurial growth for a couple of reasons. one is small companies are the source of great ideas, innovation, energy. they're also our consumers.

the vibrant, healthy economy creates more consumers so more consumers can buy tide and buy jigillett gillette. i'm passionate about this personally and professionally because i think businesses can do more to aid growth than we've done historically. i've been working on this for more years 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 universe these research institutions be more business friendly. number two, help entrepreneurs and start-ups connect with more potential partners, including larger enterprises because smaller companies staying small are not going to be sufficient. we want 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 startups? now, all three of these were highlighted. we recently, in the greater cincinnati region, we started a project -- our ceo was the co-chair -- and we said how do we create an entrepreneurial economy, a better one in the greater cincinnati area? one of the things we didn't know what was going on, we hired outside mckenzie & company to help us build a fact base of what was going on. we went out and talked to a lot of entrepreneurs, we talked to a lot of b.c.s, we talked to a lot of angel investors. the description of the region was kind of a great description of the elephant. it depends on where you're touching. these collectively helped form the view of the landscape and also helped lead us to what we

needed to do, and frankly, this is not just about cincinnati. i think it plays out in every city, every state in the country. the areas for focus that we worked 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, and i actually have a road map that says where the gaps are within our region, but also i suspect each of your states and regions have gaps in different areas. there were surprises in this. so we're only going to focus on the three or four highlighted there and i'll get to the seed investment as one of the recommendations earlier. the first one is interesting. we did not compare notes beforehand, did we? making research institutions business friendly. i have to tell you something, today's reality, it takes too long to build relationships and partnerships with your universities. in my organization, we talked to many around us in the states and also across the ob