Democratic View

September 21, 2001

ADDITIONAL VIEWS
H.R. 2666 -Vocational and Technical Entrepreneurship Development Act

Democrats understand that to start a new, successful business, one must have sound management and organizational skills. The necessity of increasing productivity, the difficulties in recruiting qualified workers from a shrinking labor force, and the importance of devising ways to meet workers' benefits, will challenge small business owners. The future of the economy depends on the continued emergence of successful small businesses.

Small business owners continue to demonstrate their extraordinary capacity to mobilize resources and generate new jobs. There are more than 20 million small businesses in the U.S., and each year, nearly a quarter of a million new ones are started. However, the majority of entrepreneurs start without receiving some form of formal business training. Many are drawn into starting their own business by the possibility of being their own boss, but to be a successful entrepreneur, one must be prepared.

In addition, many of today's workers participating in career training or vocational education, fail to obtain the necessary entrepreneurial skills that can assist them to grow and develop their own business venture successfully. This legislation will give them the tools they need to balance their trade-skill with sound business practices.

The pilot program established by H.R. 2666 utilizes the existing network of the Small Business Administration's Small Business Development Center (SBDC) Program. SBDCs awarded grants will utilize their statewide network of service centers to partner with secondary schools, or postsecondary vocational or technical schools, in developing a cohesive curriculum on starting and operating a successful business venture.

The teacher of the secondary schools, or postsecondary vocational or technical schools, will use the curriculum developed through the partnership, to provide their students with entrepreneurial skills. In addition, the teacher can modify the training to provide assistance relevant to the particular industry sector for which the students are learning the skills.

By providing entrepreneurial knowledge at the same time workers are learning a trade-skill (e.g., mechanic, machinist or HVAC repair), career opportunities are expanded. Students not only become more employable, they can become a small business owner (e.g., auto repair service, machining and tooling business, or HVAC repair service). In addition, they become the employer, thus expanding the local job market, and revitalizing and developing the economic growth of the community.

H.R. 2666 will also enhance the productivity and strength of the overall SBDC Program. By expanding the number of potential entrepreneurs, the number of potential SBDC clients will also increase. It also enhances the effectiveness of current SBDC assistance by offering entrepreneurial knowledge during the learning phase and before the initial entrepreneurial phase. After graduating from their career or vocational training, students will have the basic tools and understanding enabling future SBDC assistance to be more efficient and productive, thus increasing the rate of successful start-ups.

However, we feel the report language needs to emphasize that SBDCs will only work in partnership with secondary schools, or postsecondary vocational or technical schools, in developing and implementing the curricula and will not replace the teacher. SBDC resources should not be used to staff educational institutions. It is also important to emphasize that the curriculum will be implemented into the educational plan of secondary schools, or postsecondary vocational or technical schools, and not postsecondary educational institutions whose school curriculum already offers their own entrepreneurial or business classes.

In addition, SBDCs that are the most qualified, and with the most experience, should be given priority in awarding grants and the opportunity to expand on their current efforts. This will ensure the quality and success of the overall pilot project, especially if there are experienced programs that can ensure and produce positive results. If these results are realized, these successes may then be used as examples for the expansion of the program to other areas, where such programs have not been implemented.

One of the purposes for establishing this program as a pilot, and not as a permanent program, is to build upon the current practices, experience and innovation of SBDCs to expand the scope of their services. If proven successful, the pilot could then be made permanent and also expanded, as stated earlier, to other areas in further need. To do otherwise, stifles or discourages innovation and discriminates against those SBDCs that have taken that first step. If SBDCs develop new, innovative ways to assist entrepreneurs, they should be encouraged to expand and develop that assistance further.

Lastly, we believe that fees must not be charged in conjunction with this pilot project. Although the SBDCs are permitted to charge fees under limited circumstances, one-on-one counseling is provided free of charge. Current and past Administrations have attempted to implement a fee-for-service structure for SBDC services that are, and have been, historically free. However, implementing such a structure would not only be detrimental to the pilot program, but to the overall SBDC program. Democrats have consistently opposed such a move and will continue to oppose future attempts.

If the SBDC program is to serve a greater number of potential entrepreneurs, the centers must transfer their knowledge and expertise to those educational systems having the capacity to reach and to educate a much larger segment of those potential entrepreneurs. The centers are authorized to provide assistance of many types, but they do not have an organized program for providing the assistance established under H.R. 2666. We believe that under the pilot program, the centers can provide an effective mechanism for dispensing information and advice on developing entrepreneurial curricula. Therefore, we support this pilot program and the entrepreneurial assistance it will provide.