From the Advocate

By Tara Lynn Gray 

February 2022

California Entrepreneurship Still Leading the Way to California For All

The most meaningful and important thing I do as Small Business Advocate is listen to small business owners and mentally log their challenges. My favorite question to ask is: what’s the hardest thing right now? Lately, I’m hearing one response a lot: I’m so tired.

Yes, this pandemic has lasted longer than anyone imagined. We are all very tired. This has been a strain on every part of the system. In 2021, CalOSBA expanded the Small Business COVID-19 Relief Grant – making it the largest direct relief grant program in the nation. Additionally,  CalOSBA launched three new programs: for microbusinesses (Microbusiness COVID-19 Relief Grant), live venues (California Venues Grant Programs) and startups (the Dream Fund). We are about to unveil the last grant program from the fiscal year (FY) 2021-22 budget: the California Nonprofit Performing Arts Grants Program.

But, like the small business owners we serve, there’s no rest for the weary and no reward for sitting on your laurels.

2022 will not be a timeout for anybody…and the Governor has already provided a look-ahead at his budget priorities that anticipate what is needed for continued recovery. That recovery is still fragile, still in need of “boosters,” and I don’t want to diminish the anxiety of individual business owners, especially in the restaurant industry, during the omicron surge. But here are four reasons why I believe the pieces are falling into place to Rebuild, Restart, Reclaim, and Rejuvenate California For All.

We are rebuilding pathways for women to return to the workplace.

Nothing makes me cringe harder than hearing someone say that workers don’t want to work.

At the same time, employers didn’t imagine a shrinking workforce. The California labor workforce data shows a drop of about 532,000 between 2020 and 2019. But I think the press narrative has largely ignored the loss of working moms. According to the Bay Area Council Economic Institute, the number of family childcare facilities in California decreased from about 26,000 in 2019 to about 12,000 as of July 2020. It also reports that more men and women were dropping out of the workforce at pretty much the same rates…until September 2020 when women left the workforce in droves. There are many contributing factors to the labor shortage, but this divergence along gender lines is important to recognize.

Check out more data here on this point, including the totally unsurprising finding that Black and Latina women  took the hardest hit.

To put it simply: working moms, we need you back.

And not just to fill the ranks. Study after study show what women bring to upper management and STEM fields:

• Improved operational and financial performance
• Products and technologies that better reflect the marketplace
• Enhanced company reputation
• Higher employee satisfaction, decreased turnover 

The Newsom administration has already recognized the issue by allocating $5 million to a Women’s Recovery Response effort: grants from $25,000 to $250,000 to local women’s commissions, local government entities, and non-profits for the purpose of establishing new women’s commissions. The Program represents the first time the state of California has dedicated resources, under the oversight of the California Commission on the Status of Women and Girls, to the specific needs of women impacted by the COVID-19 pandemic.

My office will be leading the charge to both open the capital markets to women business-owners, and to help support the vital childcare industry.

We’re restarting the Technical Assistance safety net to make it even more accessible.

If there is one message I want to tell every small business owner in the state, it is this: you do not have to go it alone. In fact, the smart entrepreneur uses every advantage, like no-cost/low-cost counseling and training from our network Small Business Centers that are designed specifically to make sure that what I said about entrepreneurship for everybody is true. Let our Small Business Centers help you. The Governor included additional funding to this program in 2022, so we are looking to close even more geographic and training gaps.

Small business advocacy is about more than distributing grants, as critical as that is. It’s more than public appearances, as much as I enjoy those. It’s about telling your stories and representing your interests here in this LinkedIn blog and other forums. What I know for sure is that “giving up” is not something I’ve witnessed much in my nine months as your Advocate. I know my team and I will steer straight, if we can match you, the California entrepreneur in energy, determination, and creativity.

We’re reclaiming the word “entrepreneurship” so the concept is no longer reserved for the well-connected or the well-funded.

 I hesitate to advance the thought that there has been a silver lining to the COVID-19 cloud. But I know for sure that the stress and fear and sadness of the pandemic didn’t shut down our appetite for the California Dream. It didn’t deter people from launching new businesses — California business startups rose more than 19% in 2020 and by the same or greater percentage in 2021. And it heightened everyone’s appreciation for the critical importance of the neighborhood Mom-and-Pop, those businesses that give character and continuity to our neighborhoods. I believe anyone ready to take a risk on something that starts in their imagination is an entrepreneur. You don’t need venture funding, an initial public offering (IPO) or even to make a profit to claim the title. (Although eventually, you do need the profit part!)

What’s more — and I find this part really exciting — the best minds in the state are focusing their combined brainpower on how to preserve, expand and integrate this thing called entrepreneurship, all in the common recognition that it’s the key to an inclusive economy and thriving neighborhoods. These new ideas are influencing our culture in profound ways: our perception of risk for ourselves and our families, our ideal of a “successful” work life, and our expectations of how to exercise agency over our lives. These will all be different when this pandemic is behind us…and California thought leaders are lighting the way.

We’re preparing to Accelerate California by rejuvenating and diversifying our innovation economy along every vector: geography, industry, the identity of our business founders.

In 2021, we accepted the first set of applications for the Inclusive Innovation Hub program. This initiative speaks to three economic problems that California must confront for long-term recovery: the creation of new innovation clusters that can replicate the success of the Silicon Valley model across the state, increase social and financial capital investment in diverse founders and communities, and expand the innovation economy from the coasts to inland regions. We’re planning not only an expansion of that network for next year, but the governor proposes to up the ante with $6.5 million in Entrepreneurship Grants for businesses incubated in these iHubs.

Our dominance in innovation has produced the fastest-growing and most influential companies, the most patents per capita, the largest funding for industry research and development (R&D) funding. California is hands-down the nation’s leader on every metric. More than 50 percent of the national venture capital funding, more than $84 billion, landed in California in 2020. Innovation economies drive higher productivity and higher wages, so California must maintain these competitive advantages to continue our recovery. But we all know that this wealth is too concentrated on the coasts and not accessible enough to women and BIPOC business-owners. The Accelerate California initiative will help preserve sectors that are already strong… and redirect resources to emerging industries, underserved business groups and overshadowed geographies.

Other elements in the Governor’s plan are a $600 million investment in the Community Economic Resilience Fund to provide a framework for inclusive regional economic planning and $200 million to establish a first-of-its-kind in California Venture Bank administered by IBank. Look for more on how these can work together to accelerate California’s leadership of emerging technologies and industries.