a lot of resource and a lot of money can pay a lot of lobbyists, a lot of accountants, a lot of lawyers. i'm not being pejorative. i'm just being factual. what i believe another way of say kwhag the professor just said, which i completely agree with, is we have to reorient our thinking in terms of how we set government policy, how we create tax codes, how we create regulatory structures, and say, you know what, the guy or gal that we have in mind is the risk taker, the innovator, the entrepreneurship, the new immigrant who's opening up a corner grocery store and trying to grab onto that first rung of the american dream. that's who we have to have in mind. and right things with them in mind. the big companies, big labor, big government, let's figure out those carveouts later. but our entire perspective has to change because washington works with the big guys right

now. if you doubt that, think about what happened in the general motors bailout. whether you like that bailout or not, i didn't personally, but it doesn't matter, that bailout was negotiated by big business, gm and chrysler, big government, big labor. and who got left out of that? almost 4,000 community-based car dealer who is went out of business, and the number of jobs that were lost in koez car dealerships exceeded all of the union jobs that were supposedly saved. nobody knew, nobody cared, nobody talked about it. had devastating impact on the community. >> it's a complicated situation. there's also the part suppliers and everybody down the chain who -- >> of course, but they weren't in the framework of policymakers. that's my point. >> what carly is saying, there's a technical term, i'm sure you've heard of it, like if your pc is slowing down and has problems, you reboot it. we need to reboot america with more of a focus on innovation and entrepreneurship, what got

us to be the leading economy, to get back to those basics and focus on that. and it will take some time and require kind of building trust and relationships and building bipartisan support, but i think it is important. my only point is even though there's lots of things to be troubled by, i'm not trying to state anything other than that, there is one little glimmer of hope in that people did come together around some issues, around entrepreneurship. there is more focus in washington around -- the next panel, karen mills of the spa and kate mitchell who runs the ipo ramp will be talking on entrepreneurship -- there's more reck riggs of the role of entrepreneurships than there was in the past, building on that bipartisan momentum and that innovation momentum to get other issues like this eschew of talent done. rather than try to get everything done, let's build on a successful model and get something done. it happens to be probably the most important area because you want to get the unemployment down and be competitive in a much tougher global environment. focusing on innovation and

entrepreneurship is the key. it's the secret sauce that built america. >> peter probably has questions. >> some questions from the audience. this one is for you, steve case. i'm not sure if you heard arthur levitt's comments but he was critical of the jobs act earlier. this is i think in light of his comments. does the online provision of the jobs act go too far if companies that had a billion dollars in revenue qualify for exemptions? >> i think it does not go too far. kate mitchell is on the next panel, who led the ipo task force talk in more detail because she'll have more time to do it. they didn't qualify as a point of fact. most companies, like i mentioned when aol went public, used to apple and genentech and intel, hewlett-packard, a whole generation of companies that led the '70s and '80s and '90s when they were relatively young in their life cycle, used a public offering as a way to access the capital necessary to drive their

expansion and growth, which fueled the creation of in some cases hundreds of thousands of jobs. that's the way it was. 20 years ago, 80% of the public offerings were under $50 million. lately it's been under 20% under $50 million. it's trying to create an on-ramp for these younger capitals to access capital for a limited period of time, until five years, that they're able to go back to the markets that we had that were robust 10, 20 years ago. there were some abuses. when people make investments, whether it be an ipo or investment company, some of those companies will fail. that's the nature of capitalism and risk. the key is have we struck the right balance in terms of protecting the downside, in terms of responsible rules around funding platforms, how they're regulated, and making sure the accounting is is promote and the board oversight and the ceo liability and so forth is still all in place with the on-ramp. make sure on the downside we're protected while still enabling

the upside that really can't unlock a lot of growth and momentum in our economy. >> going to sneak in one last question from our audience. this is to carly fiorina. why is it so few business people are actually winning public office? you touched on this earlier. and will more be inspired to run if mitt romney wins? >> well, i'm not sure i agree with the premise of the question. i think historically not that many business people have wanted to run. for a whole set of reasons. maybe they love what they're doing. maybe the political gauntlet that you have to run through seem seems not worth it in many cases. >> maybe all of the above. >> maybe all of the above. here's what i think is -- i hope that we do have some business people in congress, which is fantastic, and we have doctors in congress, which is fantastic. and let me quickly say i agree with steve. i'm not being pejorative in any way to people who dedicated their life to public service. i just think we need some

diversity. i will say this, though. whether you are a democrat or a republican, whether you're voting for barack obama or mitt romney, i think we are doing a huge disservice when as a political matter we say that a successful entrepreneur or successful business person is disqualified from public office because they are perhaps wealthy or because they have had to make tough decisions in the pursuit of building a successful business. i think we're making -- we're doing a terrible harm. and unfortunately, that's frequently what happens. a business person stands up and runs for office, and they are attacked for their success or they are attacked because they've had to make tough choices, and i think that's too bad. we need diversity in politics just like we need anderson diversity in every other field, and i think people from all

fields should be encouraged to run for office and ask the same questions that others are asked, which is what's your vision of the future and what do you want to bring to the table? >> so would you ever run again? >> sure. i quite liked it. i thought it was interesting, challenging, and fun. and i think our political process is worth participating in. >> good. all right. >> with that, thank you to our panelists. thank you, susan, as well, for moderating th moderating that discussion. thank you again. we're going to continue this theme of entrepreneurship and job creation and the future of the u.s. economy. going to ask our next panelist to start making their way up on stage. mike riley, the managing editor of bloomberg government, is going to be moderating this panel. fueling entrepreneurship and sharpening the u.s. competitive edge. kate mitchell is the former chairman of the national venture capital association. ron sheikh is the founder, executive chairman and co-ceo of the panera bread company and the

co-founder of no labels. and karen mills, the administrator of the sba small business administration. thanks for being here. mike, the stage is yours. >> thank you. like old home week, these panelists know each other quite well so i think that makes the conversation more interesting. as you can see the segue about entrepreneurialism and competitiveness makes a lot of sense. when you look at the panelists we have up here, we have an entrepreneur who's shown through two businesses he knows how to build it, he knows how to create value, he knows how to create jobs. he created one of the companies that my two daughters liked the most, which is panera bread, so i thank you for that. it means we have a lot of dinners out. we also have a venture capitalist who understands what it means to invest, how to create jobs. she was instrumental in creating the ipo on-ramp and in the jobs act. so we're glad to have kate here. then we have the administrator

of the small business administration who understands how to operate the levers of power in washington. but even more importantly understands how business works and has a background there. so the big question that i think everybody wants to know the answer to, and i'm going to be taking notes here, is -- and i'll start with administrator mills -- where are the next jobs going to come from? >> well, first of all, it's a delight to be here and i want to thank those in the last panel, particularly steve case, who along with kate, were really largely responsible for creating the substance in this recent bill that passed congress in a very bipartisan way, as steef e sa steve said. so we are making some progress on some things. when you look at the jobs numbers, we worry about half the jobs in this country, because half the people who work in this country own or work for a small business. and two out of every three net new jobs come from small businesses. and there's a lot of discussion

about the segments of those. we look at three segments. one we're talking about today, which is really high-growth entrepreneurship. and there's a number of different cuts at it, but most people agree that a very small number of companies really create all the net new jobs, and these are the fast-growing entrepreneurial companies. then most of the actual employment is in main street small business. so we have to make sure that main street small businesses still open, because they open and close, open and close, there's a lot of churn in america which we view as a good thing, but we have to make sure when a restaurant closes the next restaurant opens on main street, as well as yours. we consider you the fast growth. and then for this day we also begin to have a third category which is companies in the supply chain. so we are seeing a resurgence of manufacturers, particularly small manufacturers. the door is open, i think, for

tremendous opportunity to rebuild american manufacturing. we're already seeing 466,000 new manufacturing jobs, many in small companies. we're seeing these manufacturers really create the incentive for big companies to bring production back because there's a supply chain here. and is so in these three categories we pay attention to giving small businesses the tools they need, the access to capital, the ability to grow so, they can do what they do best, which is create the jobs. >> great. kate, give me your perspective on where the next new jobs are going to come from and how you see venture capitalists and venture capital fitting into that. >> well, you know, given that i live in the world of small companies and in particular high-growth small companies, that's really where they're going to come from. the part of the jobs bill, one

of the things we did was define a new class of companies, emerging growth companies. when we grew up, we thought of small companies or large companies. these are companies in the transition from very, very small to maybe one or two people with a great idea, to a company like apple computer. it's exactly those kinds of companies that create jobs. by the way, they create ancillary jobs around them. one of the companies that we invested in that actually went public the day the jobs bill past is headquartered at indianapolis. it's called exact target, employing a lot of folks in indianapolis not just at exact target itself but in the community around it, the restaurants, you know, and i think that's part of the important recipe. so i think it's really -- it was said on the last panel, and we'll talk about it more as we go forward here, but i think beginning to think about that ecosystem as a target for policy going forward is increasingly important. so i think it's keeping an eye on these companies. ? and that ecosystem being again -- >> high-growth small companies where you have investors willing

to back unprofitable companies, you know, no revenues and only expenses and good ideas, that can grow into the next, you know, apple computer, starbucks, exact target. >> right. now, brian, you've created a couple companies and created a few jobs along with it. but what's your sense as to how your story plays into that, where the next new jobs are going to be coming from? >> just agreeing with you. we'll hire 25,000 people this year. >> great. >> but we're not necessarily the jobs we should be talking about, because we live off of all of the core manufacturing jobs and in essence the ecosystem. and i think the challenge we have so not what we do on the margin to create jobs, it's what we do in the core with the way we run our political system, the way we run our economy, and the fundamentals. you know, we talk manufacturing jobs, we're talking tax policy. we're talking what encourage eds

to invest domestically versus abroad, the inequities in tax policy, visa policy. i mean, there's a lot of structural decisions that actually make it hard to create the kind of jobs we want in this country. >> i'd make a comment as well as a venture capitalist sitting and listening to today, which has been fabulous, we live in a narrow world in silicon valley, and it's helpful sometimes to get out of that. there's been a lot of discussion about manufacturing as one of the backbones of the united states economy, and it still is. my husband's family comes from detroit. i understand that all too well. when i think about my, you know, parents, both of -- my father and my father-in-law were industrial civil, mechanical engineer engineers. my grandfather started in virginia at nasa and moved out to california to do instrumentation. and that really drove i'd say the prior economies. one of the things -- my point of view is that today's

manufacturing economy, if you will, will be tech driven, that the new engineers are not civil, mechanical, industrial, they're more likely computer engineers and electrical engineers and software engineers. that's really us reinventing ourselves going forward and why it's important for us to play offense both starting with our education, funding the basic research, proposing immigration policies, folking on high-growth companies that can create that next generation of jobs that are driven in the u.s. and not elsewhere. >> it's interesting. when you hear on the street someone talk about manufacturing jobs, that's clearly not the image that most people would come up with. right? >> agreed. >> and so how do you reframe -- how do you reincent size, how do you change the view that technology manufacturing jobs, such as it is, is the place to place bets? >> this brings up an interesting issue which one of the scarce resources right now is skilled

workforce. if you go out and talk to manufacturers across the country and you say what are you worried about and you think they're going to say capital, they say i want to attract more skilled workers. and right now there's somewhere between 600,000 and 3 million manufacturing jobs empty, not filled, because there's a mismatch. so one of the things that we have done with the department of labor and others is to create right skills now. and also the national association of manufacturers. to make sure there's a better connection between community colleges, high schools, and small and medium sized manufacturers so that they can be connected to that workforce. it's very hard for a small business to find trained workers in the next town and the next town. so we now have curriculum. and i was out in minnesota launching this, and one of the community college guys said, we really have trouble getting students from the high school. so the parents come in and they say, i don't want my daughter or

my son to go into manufacturing because there's going to be no jobs. i want them to go into computers. and the teacher said, well, actually, this machine is, you know, the machine that your son or daughter will run, but it's actually a computer attached to a machine and they're going to run the computer, so it is a computer job. that is a process that we're in the midst of, i think, as we bring more of our young people up into skill sets that -- where there are jobs now start to be created. >> ron, let me ask you, as you were building your business, what role did government play in helping or hindering the building of your business? and i'm curious to hear the entire panel talk about. you know, when does government know what to do and when to get out of the way? >> i mean, frankly, we're silly if we think that government creates jobs. and to look to government to do

that is foolhardy. we as business people create jobs. government creates a context that we operate within. and probably the single thing i believe -- i always look for the deeper problems. the single thing i believe is most pressing is the instability in long-term decisions. i mean, we have a serious, serious problem with debt. we have a serious problem with energy dependence. we have a serious problem with education and workforce. we all know it. and this instability makes it very difficult for any of us as citizens because business people are another form of citizenship, to operate. and the real challenge for us is not to look to government for a quick solution to the job crisis but really to look at our own body politic and our own political system to see whether it's really serving us or not. >> kate. >> well, i think it's pretty well understood across government that government doesn't create jobs. and whooo we -- what the

president says and what we say all the time is that we give small businesses the tools they need to do what they do best, which is grow and create jobs. so the role of government really is to step in when the markets aren't functioning. for example, in october 2008, when, you know, as we were coming in, the credit markets had just frozen for small business. the banks had pretty much shut down access to capital. and in the recovery act, we were able at the sba to use one of our core capabilities, which is government guarantees, to raise our guarantee, reduce and eliminate fees, and it was like the hockey stick that did happen. we were able to get credit flowing back in large numbers. we did about $70 billion. and this last year we did $30 billion, which was a record year for sba. so i think the point -- and it's very, very low coast because we do a guarantee. so it costs about a billion

dollars to do $30 billion worth of guarantees. i think the lesson is government can give taxpayers a really good bang for their buck, but you've got to provide access and opportunity. there are all all kinds of entrepreneurs, high-growth entrepreneurs in every state across the country, in rural area whose are not getting access to venture capital. basically it goes to three states. so how do you provide access and opportunity? how do you create low cost, in the case of small business investment companies, no cost, public-private partnerships that open up the marketplace and allow small businesses to get some tools so they can grow? >> you know, i'd say the rule of government in sitting in silicon valley, most entrepreneurs kind of think, government? i mean, honestly. so focused on creating their company, and most if they care about government, it's the local

government's taxation scheme that matters the most. talk about all government is local. but i'd say you know, as ron suggested, you know, entrepreneurs clearly over the last decade have come to understand the importance of policy, immigration policy. if want to get to a hot button with entrepreneurs. 50% of students are educated in engineering done or our tax dollars and we ask them to go home. one of the biggest hot buttons. health care, things that karen's been referring to are all really important. when i think about having spent time now between silicon valley and washington, i sort of have two comments about the way washington can work with, and when i say silicon valley, by the way, i mean that euphemistically. wee trying to sdpand beyond its hot centers. i referred to a company in indianapolis. exciting to see the kinds of entrepreneurial activity in a city like that. two things we need to take from

particularly the jobs act that i worked so closely with dick on and number one, we need to continue the collaborative conversation we have with entrepreneurs around that act. steve is a really big part of it. a lot of people look to him as successful entrepreneur himself and begin to have a positive die plo dialogue. around a resounding -- stop -- and in this case it was a very engaged conversation. i think we need as policymakers, putting my washington hat on, to think more actively about keeping that conversation going. the second thing came up on the last panel. it was the phrase, risktaking. there is a normal high failure rate of start-up companies. and it's one of the reasons when i go around the country or i go around the world that certain areas succeed at having a entrepreneurship and where it doesn't. in our business, this is venture

capital. so seeding and growing these companies through their initial lives before they can stand on their own, go public and move forward, 40% of the companies lose the money we gave them. 40% return capital. better putting the cash in your mattress and 20% make the kind of returns steve made for his investors when he formed aol. we all have to embrace and understand that. we need to understand that in washington relative to the policies we're putting forward. you can't have opportunity without a certain amount of risk. you need tone courage that, a quicker cycle of learning to move on to the next opportunity. the one that does create the jobs we're looking for. >> interesting in washington. i mean, take solyndra, a good record in terms of ventures they had. solyndra gets all of the attention and risktaking, everybody becomes incredibly aversed to it.

washington is not place that likes to take risk. i'm not sure how you change that. >> let me suggest, and it gets to one of the core issues. i travel the country. i'm not in d.c., and i'm talking regularly, places like missouri, i'm in birmingham, alabama, talking to folks that are making $10 and $15 an hour, to managers making $50,000 or $75,000 a year and the great risk, what you hear from them, they feel like our government's completely failed them. that in many ways, they -- they are the only special interests that isn't taken care of. and that the special interests, whatever they may be, are better organized than any issue, and the real risk we have is that we lose our own country, and if we can't as businesspeople, and this is where i come from, as businesspeople, we go out of business if we don't solve problems. and i think as a country, we

have to find a way to demand of our political establishment of our political leaders that we start solving problems and stop blaming each other and stop the sort of hyperpartisanship that leads to nowhere. and particularly when you realize that we're competing with nations offering national plans and disciplined well-done plans and decision-making i. m >> i was going to say looking at this legislatively, the bright side, we have passed more small business legislation than, really, the small business jobs act was the most important piece of small business legislation in ten years. and i think we just saw another terrific piece for the high growth entrepreneurs and were able to pass a long-term reauthorization of sbir. small business investment

research companies, grants, for six years that had been stuck for, i think, 17 short-term renewals. so what i see, actually, is a lot of interest in bipartisan support for entrepreneurs. that's a very good thing. and i think what people have recognized is that we've got a lot of tools. in the policy arena. i'll talk about small business investment companies, is one where we have $3 billion of authorization a year. it's zero cost to taxpayers, because the program pays for itself, and as a result, we are one of the biggest investors, kate and i will be together with a bunch of venture capitalists and investors, institutional investors, talking about how we get more capital out into these small high-growth businesses. we are one of the biggest

investors, once again, zero cost to taxpayers. so when you look at the kinds of things that you have in front of us, what we did is say, what can we do inside the sbic program to put capital into the very early stage companies? where that valley of death got wider over the past few years. and we are announcing today as part of start-up america, we committed to put $1 billion into these early, early stage companies, and the first competition is going out for experienced venture capitalists to apply. we're not going to making decisions. we're going to leave it to kate and her folks to apply, and we will leverage their investments, one to one. so they'll get more money to put out, and we will make it a competitive arena, and it opens today, and we're going to make very quick turnarounds and put the first money out this year. so we believe that we can do

things like this with bipartisan support or within the administrative authority that we have, without taking taxpayers' money, and get more of these entrepreneurs going. this is something that the president has supported from day one, and i think we've got a good momentum now behind it. >> let me, getting to that, a concrete example where that could be effective. my husband's a university of michigan graduate and i was asked, recently chair of the national venture capital association, did a lot of speaking nationwide. i was asked to speak at a business school around entrepreneurship. picture michigan. obviously, a huge need for jobs. ann arbor pumps out an incredible amount of technology of every time. battery, life sciences, clean tech, pure technology. just a found of i.p. it's falling on fallow ground.

first the challenge, risktaking. more importantly an incredible lack of capital. the average size, 250 million. the size of our firm. our current fund. the average size fund in michigan is 39 million, and not going to raise another one. they are there and we partnered in a place like silicon valley with small early-stage funds in states like michigan to start companies out of universities like university of michigan. we want them to take it through its first steps. we'll come in as the idea gets formed, get on a plane, spend time counting down ann arbor to grow. having that piece that gap, funded for firms of that size would make a huge difference for all of us in unleashing something we've already invested in as americans. so i applaud that effort. i think that will be well received. >> is it your perception, kate, there is someone there on the sidelines, ready to be invested and it's like a spigot we need to figure how to turn on? >> no.