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This morning, U.S. Chamber CEO Tom Donohue will deliver his 21st annual State of American Business address, exploring the most important trends, opportunities, and challenges facing the business community in 2020 and beyond.
Following the address, U.S. Chamber President Suzanne Clark will moderate a Faces of Business fireside chat featuring Revolution Chairman and CEO and America Online Co-founder Steve Case, and a panel of American entrepreneurs.
You can watch our live stream here starting at 10:00 a.m. EST.
Follow along here as I live blog Tom Donohue’s speech.
You can also engage with us on social media using the hashtag #AmericanBusiness.
Tune in and join the conversation!
9:40: This year’s State of American Business has gone global with watch parties across the country and around the world.
10:07: Donohue was introduced by Zawadi Bryant, founder of NightLight Pediatrics. Her company won the Dream Big Small Business of the Year Award in 2018.
“Business is what powers our lives,” said Bryant. "We have the Chamber here in Washington to take on the big fights."
The State of American Business
For the 32.6 million businesses “who help power our economy, the State of American Business is uncertain, but positive, growing, and hopeful.
The recession that many feared was looming in 2019 never showed up. And by many measures—unemployment, jobs, wages, and the stock market to name just a few—the economy is the strongest it has been in some time.
But many questions remain at the start of this new decade.
Today, we are at a crossroads, economically, politically, and globally. The debates and the decisions confronting the American business community this year have far-reaching consequences.
We are not merely asking ourselves, what will the economy look like this year or next.
Today, we are asking what kind of economy do we want to drive this nation forward?
What challenges across the country beg for our attention and action?
What is our place in the global economy—are we going to step up, stand still, or pull back? Are we going to be action or are we going to be passive?
What kind of future do we want for our children, and theirs?
What is the role of business—and government—in securing that future, and are we up to the task?
Inaction cannot be an option
Washington is one of the biggest question marks.
If conventional wisdom holds, during this election year it will be difficult to make strides on just about anything else, like:
The infrastructure deal we desperately need to modernize the physical platform of this economy.
The reforms to our immigration system to ensure businesses have the workers they need.
Or the 35 bipartisan bills that can help address climate change through innovation and investment.
Does it sound like we can afford to take the year off?
Of course not! Inaction cannot be an option.
So let’s flip the conventional wisdom that nothing gets done in an election year.
Productive end of 2019
Sound like a pipe dream? Well, just look at what happened at the end of last year, when nothing was supposed to get done.
After the long-slog process of getting the U.S.-Mexico-Canada Agreement through eight rounds of negotiations, and through the Democrat-controlled House, it is now poised for passage in the Republican Senate.
Congress also passed and the president signed into law:
A permanent, full repeal of the Cadillac Tax, the Health Insurance Tax, and the Medical Device Tax.
They has a seven-year extension to the U.S. Export-Import Bank.
New retirement options for small businesses and renewal of critical insurance programs to cover flood and terrorism risks.
This tells us there are lawmakers on both sides of the aisle who are committed to doing this business.
Looking beyond Washington
Many of the big questions, begging meaningful action, will be coming at us from the states, from abroad, and in the debate over the future of our economy and the role of business.
Meaningful action this year requires us to pay careful attention to activity at the state level—both in politics and policy.
Some of the shift in action is a result of the federal government failing to set clear guidelines on issues that are best defined through a nationwide standard or policy.
For example, Washington’s inability to make progress on data privacy is resulting in a patchwork of state rules and regulations that will stifle the free flow of goods and services across state borders.
The California’s Consumer Privacy Act took effect last week.
The initial price tag of compliance is $55 billion, and small businesses will face up-front costs of $50,000 each.
In another prominent example, some states are abandoning long-standing definitions of who should be considered an independent contractor.
Under such proposals, Lyft and Uber drivers would be deemed employees and not independent contractors.
The result? The business model that has revolutionized entire sectors of the economy will be seriously challenged and could screech to a halt.
The same is true for the innovation we are seeing in everything from home repair tasks to grocery delivery.
At stake is the flexibility and independence that have made “side gigs” or second jobs an important part of how millions of Americans support themselves and their families.
Last week one of the most aggressive proposals threatening independent contractors went into effect in—you guessed it— California.
It is already creating confusion and uncertainty for businesses and workers.
The growing skills gap and worker shortages
I’ll mention one more urgent priority in states all over the country—addressing a skills gap and worker shortages.
According to the Chamber’s new Worker Availability Ratio Index, there are now fewer available workers than open jobs across America—the tightest labor market in recent history.
We’ve identified 10 states, where every individual who wants to work could find a job tomorrow—and still, more than a quarter of the jobs would remain unfilled.
This is just one reason we will be pushing hard for real immigration reform.
We are also driving solutions at the state and local level to ensure that workers have the right skills for available jobs.
One solution is Talent Pipeline Management, or TPM. This employer-led initiative, created by the Chamber Foundation, uses best practices from supply chain management to build partnerships between business and educational institutions.
Companies in 29 states are effectively using this approach to ensure they have steady access to skilled workers.
Leadership in the world
Engaging with the world is our best strategy for strong national security and lasting prosperity.
Even in countries and regions where tensions are rising, the private sector is a stabilizing agent—and business leaders are effective ambassadors for global cooperation.
The United States must retain its role as a champion for free trade, which is a proxy for productive relationships on many fronts.
Embracing free trade doesn’t mean ignoring unfair practices aimed at us.
It means leading the way in setting the rules and enforcing them, based on the simple propositions that more trade is better than less trade, more customers are better than fewer customers, and expanding markets globally will benefit everyone.
The imminent passage of the U.S.-Mexico-Canada Agreement creates new momentum for the kinds of high-standard trade agreements that will keep us on the leading edge here and around the world.
We need new negotiated agreements with the UK (following Brexit) and EU, Japan, Brazil, and the new markets in Africa.
And we must find a way to keep and expand our footing in the booming Asia-Pacific.
Likewise, we need to tear down barriers to trade and limit the use of tariffs. Let’s not forget, American businesses and consumers pay for every single tariff we impose.
The Chamber has been a strong proponent for progress toward a comprehensive trade deal with China.
Both countries deserve credit for reaching a Phase I agreement, which President Trump will sign next week. This will begin to reduce harmful tariffs.
But there’s still a long way to go. Phase II must address Chinese trade and industrial policies that put American businesses at a competitive disadvantage.
It is in both nations’ interests to resolve those issues and restore a stronger commercial relationship.
Defending free enterprise
The debates about free enterprise are not merely academic. They are happening across the kitchen tables of hardworking Americans and in diners from Des Moines to Manchester.
These debates are playing out on the campaign trail and seeping into the policy arena, with candidates for president calling for:
- The federalization of some American businesses and hospitals.
- The elimination of private health insurance.
- An outright ban on the energy production that has strengthened our national and economic security.
- Major redistributions of wealth to pay for programs that would put the government in charge of more aspects of our lives.
- Proposals to silence the voice of American business and limit its lobbying and participate in the political process.
We will lead the opposition to the policies that undermine the job creators ... that penalize the innovators ... and that target the wealth creators and investors that allow Americans to provide for their families and plan for their futures.
Free enterprise has proven to be the greatest driver of opportunity and prosperity ever devised.
Now, we’ve never said it’s a perfect system. And the Chamber is working with partners in business and government to address shortcomings so that more Americans can partake in the benefits of a growing economy.
Even so, it remains the best system anyone has ever tried.
More business, not less
If we want to create more wealth and opportunity for all Americans, the answer is more business, not less.
We need a wakeup call in this country that dis-incentivizing growth and going after corporations as if they’re a negative force is no way to generate collective prosperity.
Those who like to beat up on big business seem to forget that we live in integrated system. Many small businesses find their contracts with large companies. And many big businesses rely on smaller ones in their supply chains. Their fates are tied.
More businesses, of all types and sizes, are critical to the growth to our economy.
So we should all be troubled that we have 20% fewer startups than we did three decades ago when we were a smaller country.
We should all be worried that there are half as many public companies today as in 1996.
The more companies go public, the more investment opportunities become available to everyday Americans—and the better equipped we will be to address critical challenges like income inequality.
When public companies succeed, people’s pensions grow and their retirement accounts get bigger.
If we want more start-ups, then we need to make it easier to start a company. If we want more public companies, we need to make it easier to go public and allow more Americans on Main Street to grow their money on Wall Street.
And for our friends on the right and the left who want to break up companies they have deemed “too big,” there is a simple solution—and it’s not more government intervention. It’s more competition.
Let’s commit to reinvigorating the American innovation machine.
Today, the Chamber is calling upon all leaders—across the public and private sectors—to set a national goal of getting the startup rate improved. Let’s try to get 500,000 a year. And let’s try pushing through 250 new IPOs.
None of the many ways business contributes to society are possible if companies aren’t being created, if they aren’t growing, and if some aren’t going public.
Conclusion: The Spirit of American business
Like the 30 million small, medium, and large businesses across America, the U.S. Chamber of Commerce doesn’t focus on what can’t be done—we focus on what must be done. We’re about the art of the possible, and the imperative of leadership.
The states are moving. The world is moving. And you better believe, business is moving.
Ladies and gentlemen, the state of American business may be somewhat uncertain, but the spirit of American business is undaunted.
It is resolute. It is determined. And it is relentlessly focused on leading into an important year, through a pivotal decade, and toward a future that remains as bright as ever.
Faces of Business fireside chat
Suzanne Clark chats with America Online founder Steve Case:
What I love about your story is it's really the whole lifecyle of what it feels like to be an entreprenuer when you have a thriving system of free enterprise.
Case notes, "America is a leading economy because of entreprenuers." He offers advice to improve the start-up environment: Level the playing field to access to capital, slow the brain drain, and create a risk-taking culture.
Entreprneuers tell their stories
Jacob Hsu, CEO, Catalyte, is tackling the skills gap: "We believe talent is abundant; we just have to unlock it." His company uses AI to find people from all walks of life with talents who can become engineers and put them through rigorous training.
John Phillips: President and CEO, AE Electrical Solutions is also confronting worker shortages in his industry. His solution is Talent Pipeline Management. "It's finding the best sources of supply of people suited for those careers and matching them to business demand," says Phillips.
Seth Weiner, President and CEO, Sonic Promos, is dealing with tariffs. "Where it used to be we'd hold a quote for 30 days, you can't hold those prices for that long anymore--sometimes a week, sometimes a day." And when prices go up, his company has to absorb some of the costs.
Charlotte Lee, founder and CEO, Kastling Group talks about immigrant entrepreners: "Risk for immigrants is almost a null issue. We have this idea of going from zero to one. So when we come over to this country we don't have anything. Where can I create value?"