Thaddeus Swanek Thaddeus Swanek
Senior Writer and Editor, Strategic Communications, U.S. Chamber of Commerce


January 14, 2020


The 2020 State of American Business speech from Tom Donohue, CEO of the U.S. Chamber of Commerce, didn’t pull any punches this year with its reminder that “inaction is not an option.” Likewise, a “Faces of Business” fireside chat moderated by U.S. Chamber President Suzanne Clark and featuring Revolution Chairman and CEO and America Online Co-founder Steve Case, and a panel of American entrepreneurs, didn’t hesitate to cover pressing topics including tariffs, immigration, and the workforce skills gap.

The entrepreneurs and small business owners on the panel added real life business voices to the varied themes in the speech including what Donohue called “an urgent priority”: the American workforce skills gap.

Jacob Hsu, CEO of Catalyte, said that his company is helping to bridge the skills gap by using artificial intelligence to find and recruit promising software developers and investing in their training. He said that after helping companies abroad to find STEM (science, technology, engineering and math) talent, he asked himself: “Why aren’t we doing that here?” and founded his company to address the issue.

“Don’t let people tell you that the skills gap or income inequality are inevitable or aren’t solvable problems. They are solvable and we can do that today,” Hsu said. “Great talent comes from everywhere.”

Another workforce gap, in the skilled trades, is having a major impact on John Phillips, president and CEO of AE Electrical Solutions in Frankfort, Kentucky. His company is facing two big workforce challenges: fewer young people are choosing a career in trades like construction, electrical contracting, and other trades, at the same time that Baby Boomers with those skills are retiring.

“[We need] to raise up a new generation of people who understand there is a viable career path in skilled trades,” Phillips said. “Unfortunately, we have too few of those people today.”

Philips also said the problem was partially geographic, with young people leaving communities or states where they grew up.

“We found that there are capable people leaving our cities, our counties, even our states, to find opportunity elsewhere,” Philips said.

To address the skills gap, Philips and his company partnered with the U.S. Chamber of Commerce Foundation’s Talent Pipeline Management (TPM) initiative—an approach that aims to close that gap by building local talent pipelines.

“Through TPM, we are able to provide a career for those people who may otherwise be leaving,” Philips said. “Most importantly, it gives a tool to the individual Chambers of Commerce to tie the business in their community to the talent that’s in their community. Through that, we’re able to have more community pride and see generations of people stay in the same area and contribute to the success of that area.”

Businesses are struggling not just to find skilled workers, but often to find workers at all. According to the U.S. Chamber’s new Worker Availability Ratio Index, there are now fewer available workers than open jobs across America — representing the tightest labor market in decades. In response, Donohue said that the U.S. Chamber “will be pushing hard for real immigration reform, so businesses can find the workers they need, when and where they need them.”

As an immigrant and entrepreneur Charlotte Lee, founder and CEO of Kastling Group, an IT consulting company, said immigrants not only have a different perception of risk, they can also add value to companies and communities.

“Risk, for immigrants, is almost a null issue. When we come over to this country, we don’t have anything… What’s everything, if you never had anything?” Lee said. “Immigrants… serve under-served communities, we go into really rough parts of cities, we take on businesses that other people don’t want to, we open at ungodly times. We run businesses that add value where there wasn’t any before.”

Another persistent issue for small business is finding enough capital to grow their business. Often, this funding takes the form of venture capital, but that funding is increasingly geographically constrained. During the fireside chat, Case said that 75% of venture capital funding goes to just three states (California, New York and Massachusetts).

“Because many of these places do not have vibrant ecosystems, because they don’t have much venture capital, there’s been a national brain drain,” Case said. “We have to slow that brain drain and create a boomerang of people returning because there’s more capital, there’s more business formation.”

In his speech, Donohue called for tearing down trade barriers and limiting the use of tariffs, noting that “American businesses and consumers pay the tariffs.” During the panel discussion, President and CEO of Sonic Promos Seth Weiner said recently-imposed agricultural tariffs had a delayed, knock-on effect on his promotional clothing line.

Weiner explained that agricultural workers are one of the largest customers for headgear. When tariffs hit the agricultural industry, that meant they had less money generally and, in particular, for purchasing hats. Meanwhile, the cost of his inputs (raw material for hats) went up.

“The need for hats is not as high as it used to be, but the cost of hats is also higher than it used to be. So…I have to sell less hats for more [of my] money, which doesn’t really make sense. I’m kind of getting hit twice,” Weiner said. “It’s a humungous piece of our business.”

About the authors

Thaddeus Swanek

Thaddeus Swanek

Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.

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