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Secretary of the Department of Commerce Gina Raimondo (right) speaking with CNBC correspondent Ylan Muiwith (left).
Secretary of the Department of Commerce Gina Raimondo (right) speaking with CNBC correspondent Ylan Mui (left). Photo credit: Screen capture of Third Way's livestream.

Secretary of Department of Commerce speaks on diversifying entrepreneurs

Secretary Gina Raimondo spoke about the Senate’s new semiconductor bill and what female entrepreneurs and entrepreneurs of color can do to get support.

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On July 20, 2022, the think tank Third Way hosted the U.S. Department of Commerce Secretary Gina Raimondo to discuss the future of entrepreneurship in America. The session was moderated by CNBC correspondent Ylan Mui.

This conversation follows the Senate passing a new bill to raise over $50 billion to fund the U.S. semiconductor industry, with votes splitting 64-34. Currently, the U.S. imports 90% of its semiconductors from Taiwan, which are used in a broad range of electronics.

Secretary Raimondo estimates that this new industry – from creating facilities to staffing them to the surrounding development that will follow – would create hundreds of thousands of jobs across the country.

For example, Secretary Raimondo named the tech giant Intel as one company interested in the semiconductor market. Each facility where semiconductors are made is estimated to be the size of a football field, if not larger, requiring several hundred people working for years to build it.

After these are built, other companies that use semiconductors in their products are certain to build close to these facilities to shorten and reduce the costs of the supply chain. This would create hubs of companies that develop around each factory, bringing in new jobs and corporate consumers of the semiconductors.

But as new companies start up, both in the semiconductor industry and elsewhere, only 2% are Black owned, 6% Latino owned, and men owning three times as many businesses as women. 

To Secretary Raimondo, this developing industry will be an excellent opportunity to promote entrepreneurs of color and female entrepreneurs. She also pointed out that the bill comes with a provision to prefer women and people of color owned businesses seeking to contract with the industry.

Secretary Raimondo wanted to highlight the Minority Business Development Agency (MBDA), an office within the Department of Commerce devoted to providing technical assistance to small, minority-owned businesses across the nation with 35 business centers across the country. She lamented that of the 56,000 people in the federal government, only 100 people were in this office. 

However, now that Congress has reauthorized and made it permanent, the MBDA is looking to launch new initiatives and she is looking to expand this office.

One initiative is the Enterprising Women of Color Initiative, which seeks to train and provide technical assistance for women of color in business. 

Another initiative is a college and university pilot program to provide funding, support, training, curriculars, and courses for diverse entrepreneurs to learn and develop.

In their final discussion point, Secretary Raimondo tackled the question of whether now is a good time for entrepreneurs to take the plunge and start their own business, or wait and see if next year would bring recession.

With two key points, Secretary Raimondo dissuaded the idea of an impending recession, though made clear there would be choppy waters ahead due to inflation.

The first was that she saw no reason for a deep recession, holding that the labor market, the American consumer balance sheet, and demand were all strong.

The second was that even if there was a recession, many strong companies have been founded in recessions, built themselves efficiently, and taught themselves financial discipline that brought them success when the recession ended.

She ended by telling entrepreneurs to seek assistance from the Department of Commerce, MBDA, and the SBA to get the capital their businesses need.

Another resource for small businesses mentioned during Third Way’s event include the Small Business Resource Navigator, which works to communicate and answer the questions entrepreneurs may have.

The semiconductor bill will go to the House next week where Secretary Raimondo expects it to pass.

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