Thank you very much, Mr. Mayor. Thank you for your introduction and thank you more importantly for your many, many years of important public service. Arthur Anderson's loss is Austin's gain. We wouldn't have him as a mayor today if he were a wealthy corporate accountant, and Austin would have lost a great deal. At this time in our nation's history, when cities are working through the after-effects of 911, the uncertainties and more importantly the effort that the people at the helm need, healers, uniters, folks to bring people together, and I believe Austin is fortunate to have Mayor Gus Garcia as its mayor.
I'm not that much younger than the mayor, and I probably feel a good deal older than the mayor, as the Texas expression "rode hard and put up wet" kind of applies. I'm reminded of a story of a frail, wizened, wrinkled gentleman sitting on a porch. And there was a jogger who ran by every day, and she noticed the utopia smile on this man's face, I mean this really happy smile. So after several days of seeing this, one day she just decided to stop and say, "Tell me about your life. You're obviously a very happy man." And he said, "I am." She said, "What is the secret to your life?" and he said, "Well, it's pretty straight-forward: I smoke at least 3 packs of cigarettes a day, I drink 3 cases of whiskey a week, I eat all the fatty foods that I want, and I never exercise." And she said, "Thank goodness, that is remarkable! Exactly how old are you?" He said, "Thirty-two!"
I don't have exactly that regimen, but I did serve in local public service for 16 years, and national politics as well-that kind of accounts for the wear and tear!
I do want to acknowledge the council persons who are present because those local public officials… there is no set of responsibilities that are more taxing or more demanding and frequently thankless than serving in a local office, and we owe them a debt of gratitude for how they serve and what they do in the community. I also want to acknowledge Jeannette, the Board of BiG, and supporters of BiG, and I think that includes everyone in this room. When I walked into the room, I was really impressed by the range of companies that are represented by the support by their purchase of tables and made this a successful event.
BiG is a pioneer in the field of micro enterprise lending. That is a phrase that gained popularity a few years ago, but I'll be honest with you, but I'll be honest with you, because I've seen it across the country, and not too many cities or too many entities have figured it out. Not too many communities are doing it well. I've had the good fortune in my years, including those years while I served as Secretary of HUD to visit over 200 different American cities. My beat was the city center-the public housing projects, working with the mayors in 200 different places, some of them repeat visits as often as say, 25 times during those 4 years. Places like Los Angeles after the riots, like South Miami after Hurricane Andrew, places where we had particular big problems like Chicago with its big housing complexes, and I can tell you that the concept of micro enterprises, while well-defined theoretically, is not well executed.
From what I have been able to tell of the actual performance here, BiG is doing an extraordinary job and is a major factor in providing an element of the type of the small business services that a community like Austin must have. The unique combination of providing business capital and linking it to training has made it possible to serve over 700 residents with the BiG formula. Since 1996, BiG has been an SBA lender, a CDFI Community Development Financial Institution lender-now keep in mind that this is a special initiative begun in the 1990's in which the Department of Treasury selected entities who will receive a special certification to provide micro enterprise lending to small businesses, and BiG has been one of these.
Let me just share a few thoughts with you, and I promise I'll be brief, because the program is centered on the fact that the awards will be given today. But I wanted to share a few thoughts with you that are in part almost of a confessional nature in the sense that I served as Mayor of San Antonio for 8 years and got elected on the platform of economic development. San Antonio had been lagging economically, and I felt it was not only the best strategy for raising incomes and creating opportunity in a poor city with a larger poverty population than it ought to have, but also a way to bring people together because the city had not focused on economic development and as a result, they never had to have the common rallying point-the common theme that could bring together minority advocates, labor leaders, business leaders, corporate leaders, civic community-everyone working towards a particular theme. It proved to be a good strategy for advancing the community as well as brining people together.
But I made the mistake of focusing principally on what had been called "smoke stack cases", which is going around the country as a city leader trying to bring industry from another place. We had a fair amount of success. I made a semi-annual trip twice a year to the Silicon Valley, to San Jose, Palo Alto, Mountain View, Sunnyvale, to talk to companies like Hewlett Packard who in that day were making a decision about a new plant somewhere in the United States literally about every other month. We had some success in getting companies like DLSI and Sony and other s to locate technology plants to the community. I made one trip a year to the east coast to call on the bioscience companies, the complex of pharmaceutical and biomedical companies that tend to be concentrated in New Jersey and in Connecticut and New York and had less success there because they were not companies with the same level of dynamism. They didn't need new plants and such.
But most of my efforts in those years concentrated on bringing in industry from other places, and the successes we did have were not in the sectors that we expected. For example, downtown-related, terrific activity, hotel activity, Sea World, Fiesta Texas-a lot of those things fell in our lap in that era. But what I didn't understand-an oversight if you will-a lack of complete comprehension on the way the economic development process works… I didn't put enough time in those years into what I think now is the sturdiest, most resilient, most dependable kind of economic development a city can pursue, and that is to focus on the indigenous small businesses in the community and grow the economy from the roots up. From the ground up. I am convinced over the years that that is the surest way to build a city economy in the long run. It's not as glamorous as the kind of effort we were involved in together to bring MCC to Austin or the Sematech-what went on in that era. It's not as glamorous, and it's not as quick-pitted as a plant that will come in and bring two-to-three hundred people, and you can be there or the plant can already be there. It's not as satisfying, in some respects, from a political profile. But on the other hand, as I look back over the years, a lot of those plants that announced two-to-three hundred jobs left as the economy changed, and they're now vacant buildings or have been transformed into something else. In fact, data shows, research shows, the national scholarly work shows, and or experience tells us that the surest way to build a local economy is the longer-term, patient, steady work of focusing on the small business capabilities in the community and watching them grow.
Let me give you some other reasons why I think this is important. First, over time, in any community in the United States, most of the new jobs in a city-tally it up after any period of time of years, a year or 5 years or any period you want-most of the new jobs created in that period of time are created by small business. When small businesses employ 3 people, expand into 5 or 10 or 20 and that's repeated hundreds of times across the community, you overwhelm that 200-300 person plant that is going to grow like that. So number one is those jobs.
Secondly, the base that is created is a more diversified base. It is a net under the city economy. It protects the city from the business cycle and from the cyclical effects of particular industry sectors that are concentrated when affected by the economy. So that a heavy emphasis on technology, we know what that means. Silicon Valley and, to some degree, Austin saw a strong net of smaller businesses that are strong and capable, diversified in the economy is very important.
At the personal level, the new economy, with its focus on the Internet and technology and new products, creates an unprecedented opportunity for people to get into new businesses of all kinds. It's a certain kind of what people refer to as atomization, you know, the breaking down the smaller components of our American economy. There is a certain individuality that is rewarded when people focus on something they know-something they can build-something they can create, and build a business around it. It creates a certain level of enterprise, of creativity in local economy that you don't get from focusing on larger corporate or bureaucratic-behaving enterprises.
That independence is critically important as well in creating leadership for the community. I think you've seen this in Austin. Out of the small business base come folks who are not primarily ideological. That is to say, they are not liberal or conservatives or Democrats or Republicans. They're just good citizens, and they want to do things in the community. They bring common sense, and they meet a payroll, they're responsible folks, and they have as a result of their business independence, they have the time to give back to the community. My guess is if you look at who serves on school boards, who serves on your zoning commission, your planning commission, your city-appointed body, and all of the other things where you need good people, smart individuals who can give back to the community, that an extraordinary number of them come from the small business base. If they're good, their businesses have grown, and maybe they're not that small, but they started out as small businesses. They are the backbone of communities.
Additionally, I think we can find that small businesses have a tremendous effect in neighborhoods. That is to say, dying parts of the city, pats that are lagging behind, coming back strongly. Just last week, I had the opportunity to participate in a meeting in Boston, organized by Professor Michael Porter who is the guru at Harvard of this subject. The subject is inner city businesses. He is the person who created with Inc. Magazine the Inner City 100 to recognize and acknowledge the contributions of small businesses who are reshaping inner city areas. It is a fascinating concept. He says there's almost a trillion dollars, $920 billion dollars of disposable income in central city areas that small businesses are tapping wisely across the country. He calls it the next emerging economy. Like you think of emerging markets in foreign countries, right within our own nation is this tremendous capacity for business advancement, and for small businesses in central areas.
In the final analysis, of all the reasons why it's important, fundamentally it is important because it allows people to create wealth in the American way. When a person starts a small business, they're not just working. They're not just drawing an income or a salary, but they invest themselves in not only that business, but the community. Their future is now tied to the community. As the incomes and progress of the community goes forward, that small business person benefits. They see the connection between markets and incomes and progress, and that is a great, great thing.
It's also a great thing when you wee a person who never was in business before be able to pass on knowledge of business to their children, and now we have a generational impact-actually leave behind something of value to the next generation. Just last night in my home, I had a young man come by that I had met through my work at the Hispanic Chamber in San Antonio with a landscaping and nursery business, because we we're doing some landscaping to our home there on the west side of San Antonio. And he described to me how his father started the business and how 3 brothers and a sister now work in the business, and they all get along and the rule of the family is don't be mad at the end of the day. Fix it before you leave. Family can't afford to be made at one another, but what a magnificent thing! College-trained young men talking seriously about the geniuses and species of trees and of plants and shrubbery and grasses, and then overseeing a workforce, and all of them coming together at their place of business and enjoying themselves both socially as well as in business. What more satisfying American story can there be than to see that progression, and to see it in minority communities? Minority communities where people never had those role models; they never had those opportunities.
Oh, I'm serious! What BiG is doing is fundamental to the city of Austin and is a role model for what needs to be done in communities across our nation!
Let me just close my remarks by saying that, as I have witnesses this, I today have had the good fortune-I think that is why Jeannette asked me to be here today-I have the fortune of being Chairman of the San Antonio Hispanic Chamber of Commerce, and I have the opportunity now, as Chairman of the Chamber my second year, to make up for what I didn't get when I was mayor those years ago. I didn't understand it then. But we have been slaving-we have been obsessing-in our strategy of supporting small businesses this time around.
There are 4 elements to what we're doing, and I just want to put them out there, because I think they fit together. First of all, the most important thing, THE most important thing that every survey of small business people tells us is the number one issue is access to capital, so to be here today with an entity that is focusing on access to capital for those smaller businesses, those smaller amounts that it takes to get started where the bank won't event talk to you about those numbers and preparing people for that is the most important thing. It is job one in this field.
But there are other things that need to occur. We have found it's very important to create networks that link the small businesses with the larger purchasers of goods and services in the economy. In San Antonio, that has meant the utilities, the City, the University of Texas Health and Sciences Center, the community colleges, the larger private businesses. We know, for example, that HP Zachary, one of the largest constructors in the United States, headquartered in San Antonio, buys a good deal of what they need to purchase for 34 power plants they're building across the world right there in that market. And they solicit nationally, but it never really created networks of the existing small businesses that could provide all those services. I'm not talking about just pipes and fittings, but health services and food services and all kinds of supplies that any business needs to operate. In Austin, that would mean linkages to the University of Texas, to the hospitals, to the state government, the larger employers here, to the technology sectors in order to create those ties.
In technology, where we're creating a push of biosciences as a big anchor, the next leg on our economy, we're now trying to think about how our small, indigenous neighborhood minority businesses can participate in the biosciences explosion, and there's a thousand ways it can be done. We're doing a conference this summer on exactly that subject, so networking, creating a real linkage of these small businesses to the larger purchasers is critical.
A second thing that I would like to mention is education for entrepreneurs. You're doing that already at BiG. To the extent that you can extend that across the community even more broadly is very important. This young man who was in my home last night, I met because we've created a class of small businesses, of entrepreneurs, with already a little bit of a record, not starting fresh, to teach them together. Have them communicate together about what they need to know from each other in order to advance. The critical question is "What do you need to know in order to grow?" Not to get a degree, an MBA, a certification, an award, but what do you need to know in order for your business to grow to the next level, and let's find out what that is and help you get it. I really believe in that. And I believe in it for minorities in particular, because unlike in other families where the conversation has been about stocks or real estate or hirings or other matters in the normal course of things, in many minority families right now in this city, in Austin schools, that conversation never occurs around the family table. It just doesn't happen in a family whose parents are custodial workers or whose family are laborers. So unless society intervenes to take these young people to the next level and understand what American enterprise and capitalism is about, we're not going to advance as rapidly as we could in this arena.
Finally, it's important to tell the story-to remind people in the community, as we're doing today-of the importance of small business. We've launched a campaign in San Antonio that has nothing to do with this BiG, but it is called "Think Big, Buy Small". All over San Antonio, you see billboards, on television there are PSA's in the newspaper there are advertisements-all of them with that message: Think Big, Buy Small. Let's try to build our own local businesses.
So, if it's possible to have second acts in American society, this is my second act! We were okay in the first round. This one, of trying to build the local economy by focusing on opportunities that I think creates more solid resilient progress creates a measure of economic justice, and creates families that can be the bedrock of our communities for the long run. Those are the stakes. That is the dimension of what this represents.
Congratulations to BiG and all who support it for being part of that agenda.