tragedy. so we have to take long-term steps to fundamentally reform our education system. i think we have to take very difficult but very important political steps to fundamentally simplify and reform our tax and regulatory structure, both of which will help to get the entrepreneurial foundation of this nation rebuilt, which is critical. >> you know, steve, everybody says the key to job growth is innovation, and i'm sure that's true, but innovation is a little built of a two-edged sword too in that it can take jobs away, as well. and a lot of these jobs that used to be good middle-class jobs have disappeared because of variation innovations. is there going to be a time, do you think, when innovation is going to help more people get jobs than lose jobs? >> sure, sure. >> and i think building on what carly said is the history of america is not just of patriots building the nation, but entrepreneurs building the

nation. we didn't just become the leading economy in the world by accident. it was the work of entrepreneurs taking risk, building not just companies but entire industries that were based here. you can look at the last two countries and there are different chapters where entrepreneurs were essentially ushering in a new era of innovation and economic growth and job growth. we sometimes lose sight of that and kind of take that for granted. and we shouldn't. as carly said, all of that job creation, according to the kaufman foundation, is from high-growth companies. also she said, it's true, new start-ups are down 23% in the last five years. we have to get back to focusing on the role of start-ups and entrepreneurs, to drive economic innovation and job growth and drive job creation. and the positive thing in a town where there's not a lot of positive things to say, but there was broad bipartisan support in the last six months that came together with leadership from the white house, strong

leadership from the house with eric cantor and, you know, president obama and rick cantor don't seem to agree on a lot of thing, but they did agree this was an important thing to focus on, passed the house and the senate with overwhelming support. it was signed by the president a few weeks ago. it's called jump-starting our start-ups act. particularly focused on access to capital. so something got done, and it was important. but there are other things that still need to get done. i think the most important one, there was an interesting editorial of your competitor, the "wall street journal," this morning, that i think is worth looking at, is winning the global battle on talent, which gets to this issue of high-skill immigration. anything about immigration is sensitive, particularly in an election year, but almost half of the high-growth companies are started by first- or second-generation immigrants. if you want to see a job creation movement going, you have to be a magnet for talent. we are, getting from people all around the world, coming to our universities to get ph.d.s, but then we kick them out and force them to create companies at home instead of here. it would be the equivalent if we

lured people from china to our naval academy, train them on our naval secrets and force them to go back to china to be part of the chinese navy, nobody would think that's sensible. but that's exactly what we're doing. over half of the people getting ph.d.s at carnegie mellon, stanford, m.i.t., half are from other parts of the world and once they get the education we kick them out all too often. those are job creators because they are the innovators that are building this momentum around innovation and job creation. >> i think that most people would probably agree that they would love to see, you know, highly skilled, well-trained, educated immigrants come here and be able to stay. what you hear from people in congress, though, is it's completely unrealistic just to be able to solve that piece of the immigration problem without solving the bigger piece. >> yeah. i don't -- there's something a little bit off pitch, i think, about focusing so much on high tech and silicon valley and high education.

i'm an educator, so i feel uncomfortable saying those things. but i think talking about 19th century america, which is a remarkable story that actually i'm writing about these days, it was -- you had innovativeness over the whole breadth of the economy, not excluding farming, far from it. you know, the plow that broke the plains. that was a huge thing. and you had people at the grassroots waking up every morning, rushing to get to work to tinker with that thing that they want to make better or make different or something. i don't have the -- i yield to our ceos here, but i don't have the impression that business life is all that oriented around change and novelty and constant

embrace of uncertainty, and let's try it, let's leap into the void. i understand there's a lot of cost consciousness. i understand that american corporations are the wonder of the world in how effectively they minimize unit costs. but i'm talking about another dimension of business life. >> and i agree with you a thousand percent, because when i talk about small business, yes, some of those small companies will grow into aol or google. but the truth is most of those small businesses are the ones i started out. i started out as a secretary in a nine-person real estate firm. the dry cleaners, the car dealerships, the community banks, the restaurants, the real estate brokers. these are the backbone of a community, and, yes, there's plenty of opportunity for innovation unless you're just strangling under a whole set of, you know, rules and business conditions that make it very difficult. so i completely agree with you

on that. and it's small business in general that we have to focus on. but i want to come back to your political question for a moment, because, you know, as a business person, i ran for office. i ran for the u.s. senate in california. and the reason i did that, clearly i lost, but the reason i did it and the reason i encourage more people to get into politics is because i think -- first, i think we have so many professional politicians who honestly, have no other experience other than running and winning for office, and it's a valuable experience, but it's not the breadth of experience. we were intended to be a citizen government. it's how our founding fathers thought about it. actually until maybe 60 years ago, we actually were a citizen government. you know, people went into public service and they departed again to private life. and here's one very clear difference. in private life in business,

small business, big business, it doesn't matter, if you have a big problem, you don't start out trying to solve the whole thing. you start out trying to solve the bits you can solve and that you can agree on. that's how we work big problems in our families. it's how we work big problems in our business. so a business person wouldn't say, oh, my gosh, we have this huge comprehensive immigration problem, let's not do anything until we can get absolutely everybody to agree on everything. no, we would say, you know what? we can agree on h-18 visas. let's go get that done. >> nothing about the jobs act, about high tech companies. it was really about lifting that up. the fastest growing companies are restaurants like chipotle or companies like under armour. also to lift cup ecosystems all around the nation so we're less reliant on a few such as silicon valley, point number one.

point number two, there is a difference between big business, small business, and the other. big business, large companies, the way i think of them are defenders trying to protect the status quo. small business, as carly said, really are the backbone of the nation and those strunts and dry cleaners on main street are critically important and account for a lot of jobs. but the real leverage in terms of job creation and economic growth are these high-growth entrepreneurial companies across many different sectors. that's where the focus of the jobs act has been and the focus of some of these other initiatives and how do you unlock that sector and make sure it's growing across the nation, across many different parts of the economy, not just a few. >> let's talk a little bit about the jobs act. i think right before you came in, arthur levitt was saying that it was going to destroy jobs and it was the most investor unfriendly thing he'd ever seen and everybody who ever voted for it would come to regret it.

>> i missed that. >> just from the other point of view. and i think one of the criticisms of it is that it rolls back a lot of the protections for investors that really came thome hurt people during the dot-com buzz. you know, a lot of those conflict of interest issues. you know, so that didn't work great the first time. why is this going to be so much better now? >> well, i understand there are some concerns. i think any of these concerns, it's a balancing act. how do you make sure you have access to capital that can fuel these entrepreneurial companies and innovate and create jobs and be competitive in a global world. at the same time, how do you protect investors. i think what was put in place struck a reasonable balance. the s.e.c. is writing specific rules. they won't go into effect until early next year. so there's a lot of work to be done. but the basic framework makes sense. i remind you the securities act with some of these things were kind of based on, you know, 1933. 80 years ago. other things out there were 30 years ago. 80 years ago most people were not individual investors, mutual funds didn't exist, the internet didn't exist. so saying that nothing should

change doesn't really make sense. the issue of ipos is important because when aol went public 20 years ago, the first internet company to the gmts public, we raised $10 million. nobody goes public now and raises $10 million. what happens is they go public later or get sold. more often they get sold. when they get sold, job growth decelerates, when they go public, job growth accelerators. so a company that has $100 million of revenue that's been around five years should have exactly the same rules as a company with $100 billion of revenue around for 100 years doesn't make sense. even sarbanes/oxley put in place records. set the bar in terms of the market value too low. i totally understand and am sympathetic to the concerns about protecting investors. we also need to make sure we're not just focusing on keeping bad stuff from happening but also enabling good stuff to happen. i think that struck a reasonable balance and that's why i think it had the such broad bipartisan support. it's up to the regulators to put the rules in place and up to the industry to put the self-regulations in place.

so it does maximize the benefit and minimize some of the risk. >> i was just going to say, if we take the discussion about immigration or this act where there was bipartisan agreement to do not everything, but something that was perhaps small but important, we can't seem to get the same agreement to move forward on immigration, let's just bring that principle back for a moment to tax policy, because i think we could actually get, even in this town, quite broad spread agreement that if you lowered the rates -- business rates, which are now the highest in the world -- if you lowered rates and closed loopholes, that warren buffett would effectively end up paying more taxes, that we would actually raise revenues, we would vastly simplify the tax code, which would be hugely important for small businesses and innovators and entrepreneurs.

i think there's broad based agreement and i don't expect anything to get done, sadly, but that would be an example of taking on not the whole problem but a piece of the problem of -- and solving it. >> we have just lived through a year in which, you know, i don't think that anybody in the american public would say has been very laudatory, how congress operated and how the branchs of government worked together. so we've got a budgetary train wreck headed our way come the end of this year. you know, what is going to happen if there is not some kind of agreement there? i mean, what is going to happen to our economy? what is going to happen to jobs? >> it's going to be a bad situation. and i think -- someone was making the point, perhaps it was arthur levitt, that uncertainty is killing to job creation, and that's true. so you have this major train moving down the track, which is a lot of bad news at the end of this year. i don't know. i am sometimes eternally

optimistic, and i do think that politicians on both sides of the aisle are keenly aware, i hope, that, while they may be able to postpone the public's appetite for action and problem resolution until the election in november, they will not be able to postpone it after that election. people are expecting something to happen, because it needs to happen. so to me, if people were finding the areas of agreement that we could come up with a solution on now, that would be time well spent. >> i also think -- i respect anybody who is willing to serve and people like carly willing to run. i'm not. i want to be an entrepreneur, and fund entrepreneurs and that to me, is my core strength. anybody who's willing to do it, it's a tough job. >> i agree. >> i respect that. and at the time i spent, particularly the last six months, working in a bipartisan way on this jobs act, i had discussions with dozens and

dozens of people, republicans, democrats, house, senate, they are really frustrated too. they understand everybody's frustrated of sort of this do-nothing congress. they are equally if not more frustrated because they didn't come to washington and give up other things in their lives just to be arcing on talk shows. they want to get important stuff done. they are frustrated. the question is, how do you come together? >> the jobs act, even though it was a small part of the broader economy, even only a piece of the broader entrepreneurship agenda, it was an important thing for entrepreneurship and job creation and an important signal that maybe people can focus and come together on some things where they do agree it's important, they don't get exactly everything they want, but they move the ball forward in a constructive way. hopefully, we can build on that spirit of bipartisanship. i thought it was great when the president was signing the jobs act and eric cantor was standing behind him. i think that was a signal not just for entrepreneurship but people who want to come together and get stuff done. >> let me ask our nobel economist, what is it

government needs to do to get job growth going again? >> i think it -- it needs to do everything we can think of that will stimulate creativity and acceptance of uncertainty and adventuresome spirit in the business world. i mean, there's just nothing that -- anything that looks halfway promising, we should go for that. but specifically, i think of a couple of things. one is that corporate governance in this country seems to me to have gotten so bad in recent decades. it was bad already in 1932, when -- at columbia what was it, gardener mains or somebody have

it? famous book, 1932 -- wrote about the divorce of ownership and control. the managers had seized control of the ship. the owners were not able to defend their interest. it's much worse now it seems to me. then we have the problem of mutual funds who threaten ceos with dumping the stock unless they hit their quarterly earnings targets. my god, that breeds short-termism. it's just the opposite, i'm sure you agree. >> that's right. >> just the opposite of what we need in american corporations. >> corporate governance, short-term thinking. >> and then the financial sector. what's happened to the small banks who used to lend to those small businesses and new businesses? they got gobbled up by the big banks. maybe that was in part a by-product of legislation in recent years.

we have to somehow reconstitute this face-to-face lending from banker to entrepreneur that once used to be so basic to american innovation. >> i'm sure you hear from small business owners that they can't get the loanses that they need. >> it's true. and, you know, this is a tall order, what i'm about to say, so let's stipulate that it's an aspirational goal. if you think about steve started a small business that became a big business. i started out in a small business, but most of my career -- my business career was in big businesses. at&t, hewlett packard. and here's what i know. the tax and regulatory structure of our nation is written by, negotiated with, gerrymandered by big business, big government, and big labor, because they have big lobbying money. so what you have are these very

complex structures, tax and regulatory, that people who have 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 saying what 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 entrepreneur, 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 write 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 dealers who went out of business, and the number of jobs that were lost in those 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. >> i mean, 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. >> i see. >> 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. you kind of start over.

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 it's going to require kind of building trust and relationships and building bipartisan poirt, 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, kirnl mills of the sba and kate mitchell who runs the ipo ramp will be talking on entrepreneurship -- there's more recognition of the role of entrepreneurship than there was in the past is, we need to build on than bipartisan momentum and than innovation momentum to get other issues is like this 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. >> i think peter's probably got some questionses from our audience. >> this questi >> 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 such as groupon 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 -- including apple and genentech and intel it, hewlett packard, a whole generation of companies that led the '70s and '80s and

'90s when they were relatively young in their life cycle, they used the 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 companies 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 when we had -- 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 that's the nature of risk. the key is have we struck the right balance in terms of protecting the downside, in terms of responsible rules around crowd funding platforms, immediate areas and how they're regulated and making sure sure the accounting is is

promoted 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 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 a successful businessperson 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 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 is it 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 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 panelists to start making their way up on stage. mike riley, the managing editor of bloomberg government, is going to be moderating this panel. we're looking at 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 joining us here, karen mills, the administrator of the small business administration. thanks to all of you for being here, and mike, the is taken is yours. >> thank you, peter. it's kind of like old home week being with these panels. they know each other quite well so i think that makes the conversation more interesting. as you can see the segue into this group where we'll talk 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. greatly, 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 all those in the last panel, particularly steve case who along with kate were really largely responsible for creating the substance in this recent fwhal passed congress in a very bipartisan way, as 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 -- business is 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 bil