Tuesday, March 8, 2011

Obama Gets Serious About Innovation With Cleveland Entrepreneurs

By Carol Tice

President Barack Obama has been out meeting with entrepreneurs before, but usually just a few at a time, as he did last summer in Seattle. But in mid-February, Obama had his first major small-business confab with more than 100 Cleveland-area business leaders. The event -- a followup to the State of the Union Address dubbed the Winning the Future Forum -- also featured a half-dozen cabinet members and other top-level administration advisors. One star-quality guest was AOL co-founder Steve Case, who is chairing the president's new initiative, Startup Partnership America.

I had a chance to speak with several attendees about the event, who described it as a great opportunity to reach top-level administration officials and tell them about entrepreneurs' real-life issues. Sure, it was also partly a media opportunity for Obama to get out the message that he cares about small business...but there was real substance to the meetup as well.

After Obama gave an opening speech, the forum divided into small breakouts on topics including entrepreneurial endeavor, youth engagement, export, workforce development, access to capital, and clean energy. While the entrepreneurs had to pick a breakout and stick to it, Obama was free to roam through the various sessions, reports John Dearborn, CEO of JumpStart, a Cleveland nonprofit that assists small business owners.

It was definitely not an audience made up entirely of friendly Democratic business owners, either. Some participants expressed serious disatisfaction with the way Obama has treated entrepreneurs so far.

In the breakout sessions, administration officials took notes on what entrepreneurs said they'd most like to see the White House do to assist them. For instance, new patent-reform legislation, Patent Reform Act S23, was a major concern expressed by Cleveland Medical Devices CEO Robert Schmidt.

"People don't understand how onerous it is," he told me. "It will price independent inventors out of the market. The price to protect an invention will be $250,000-$500,000."

Schmidt would also like to see more research and development funding from the Small Business Innovation Research (SBIR) program and other federal R&D efforts go to small companies instead of large corporations. He says that though 38 percent of engineers and scientists work in small businesses, less than 5 percent of federal research money goes to smaller enterprises.

"The people who produce the most wealth and create jobs, we underfund by an order of magnitude," he says. "Then we're surprised when we don't have jobs."

Getting the government-contracting system to run better was an issue raised by several participants. Synergy Marketing Strategy and Research CEO Rachel Talton asked for reform in the process of obtaining federal contracts, to make it easier for small businesses to apply. Others asked that the government pay its contracts faster, as its slow payments can cause cash-flow problems for small business owners.

Possibly the best news out of the conference is that it wasn't just a venting session. Participants report they are expecting to hear back from administration brass on their ideas. Talton's company plans to help the White House with research, and she says officials were huddling with her immediately after the forum concluded.

JumpStart's Dearborn took notes for the administration in one of the breakouts, and says he was asked to hand them in immediately. He high-tailed it back to his office and typed up his notes, sending them off to the White House at 10 pm. We'll see what comes out of this interesting exchange between Cleveland's small-business community and Obama's team in the coming months.

What do you think the government should do to help small business owners? Leave a comment and let us know.

Obama photo via Flickr user aflcio

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