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Statement of the Honorable Nydia M. Velázquez, Ranking Member
House Committee on Small Business
"Tales of Resilience: Small Business Survival in the Recession"
July 25, 2012

Since the financial crisis of 2008, this Committee has been regularly examining the strength of the small business sector. In the past, we have shed light on credit conditions, consumer spending, and changes in employment. Throughout our hearings, it has become clear that small firms have reacted differently to the downturn and recovery that followed.

For some, these difficulties have meant scaling back their operations and cost cutting, but, for others, this period offered a chance to expand. Given their nimble nature, entrepreneurs and small companies have been more readily able to capitalize on these opportunities, creating prosperity in the face of adversity.

We should not be surprised some small businesses thrive in a tough economy. Throughout history we've repeatedly heard the story of resolute entrepreneurs overcoming difficult circumstances to strengthen and rebuild our nation. One might say, "When the going gets tough, small businesses get going."

This most recent recession and recovery have been no different. According to a Kauffman Foundation index, entrepreneurial activity has been higher for the three years since the recession ended in 2009 than for the four years prior. In 2011, this meant that on average nearly 550,000 new businesses were created each month.

Nonetheless, it is clear many difficulties lie ahead. The sovereign debt situation in Europe continues to be a drag on the U.S. economy, particularly for firms that export. In addition, the "fiscal cliff" is creating uncertainty, thereby hampering investment and expansion. Together, these issues are weighing on small businesses and undermining consumer confidence, which hurts sales and revenue growth. This has resulted in a tentative overall economic picture.

Yet, as they have before, small businesses remain a guiding light. The most recent ADP employment report showed that small firms created 93,000 jobs, accounting for more than 50 percent of all employment gains.

In that regard, today's hearing is critically important. In every corner of our country, small businesses are driving our economy forward. Whether it is Kansas City Missouri, or Brooklyn New York, the picture is the same – small firms are creating jobs and restoring hope in communities hard hit by the downturn. Today, we'll hear more of these inspiring success stories – and what we can do to replicate them elsewhere.

In that regard, I want to thank our small business witnesses for testifying today and sharing their valuable insight with us.

Thank you. I yield back.

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