By: Tom Sullivan and Sandy Baruah

This week is Global Entrepreneurship Week.  From a business competition in Egypt to a mentoring workshop in Honduras, to a massive networking event for entrepreneurs in Tampa, Florida, millions of people will participate in activities around the world designed to capture the spirit, innovation, and power of entrepreneurship.  Here in Washington, leaders are advised to take notice of how government policies affect entrepreneurship and proceed cautiously on impacting the sector that is best positioned to rescue our economy.

Washington is furiously exercising the levers of government power to lift our economy out of a recession.  Massive amounts of taxpayer capital was rushed into banks and stimulus projects to rescue the economy from the abyss.  Then, why is so much of the money still in state and federal coffers and not translating into jobs?  Last week, the President basically asked that same question and called for a "jobs summit" in December.  Based on the President's announcement, small business will have a seat at the table for that summit and I challenge them to express their views loudly.  

It is a mystery why more people do not understand how important small business is to job growth.  From 1987-2005, firms with fewer than 20 employees accounted for 86.7 percent of net job creation.  The Ewing Marion Kauffman Foundation knows that job growth comes from new firms and has published volumes dedicated to the importance of high-growth start-ups.  Maybe the power of that information coming from President Obama's podium during the jobs summit will help more people understand the importance of small business when it comes to job creation. 

I am hopeful that at least one brave small business will thank the President for wanting to do more, but will gently explain to the President that sometimes LESS can be more helpful, especially when it comes to government regulation.

Allowing for entrepreneurship to thrive calls for a "light touch" that challenges government to both stimulate credit markets to make capital available to small firms and to remove unnecessary government burdens that can stifle growth.

SBA Administrator Karen Mills is on the right track, accelerating the efforts begun in the previous Administration to make the SBA lending process less-burdensome and invite more banks, especially credit unions and community/regional banks, into the fold.  Community banks and credit unions continue to be overlooked sources of business capital and SBA deserves credit for bolstering efforts to keep these lenders, many less impacted by the financial turmoil of the large banks, focused on small business lending. 

While the government wants to do more to help, it unfortunately can be blind to the unintended consequences of government mandates.  For instance, the President's financial regulatory reform proposal seeks to make lending information easier for small businesses to understand.  However, the creation of the Consumer Financial Protection Agency called for in the proposal is expected to raise interest rates by 160 basis points.  From a small business perspective, it would make more sense to achieve better disclosure for financial products under the existing system than to create a whole new agency that will issue regulations driving the cost of credit up for consumers and small businesses.

From financial regulation to curbing greenhouse gas emissions, government must be sensitive to how regulations impact small firms.  Firms with fewer than 20 employees spend 45 percent more per employee to comply with federal regulations.  On a per-household basis, the cost of small businesses keeping up with federal mandates exceeds the cost of healthcare.  That is not to say entrepreneurs want to wish away financial oversight and environmental protection.  To the contrary, small business owners want government to recognize that a regulation designed for a global accounting firm to comply with Sarbanes Oxley, does not necessarily work for a small firm.

Al Gore's reinventing government initiative instructed policy leaders that "smarter regulation" is better than "more regulation."  Perhaps it is time to grab some magnifying glasses and weed out the regulations on the books that may be duplicative, unnecessary, or out of date.  Deleting an item in the Code of Federal Regulations may not seem like a big deal for some.  But, streamlining the regulatory process can mean a lot to an entrepreneur who wants to follow the rules, but is quickly overcome by their complexity.

The energy, enthusiasm, and spirit that will echo around the world this week during Global Entrepreneurship Week deserve to be noticed.  And, the small businesses that participate in the jobs summit deserve to be heard.  If we want to create jobs, Congress and the White House should listen.  

Tom Sullivan served as the Chief Counsel for Advocacy at the U.S. Small Business Administration from 2002-2008.  Sandy Baruah served as the Assistant Secretary of Commerce for Economic Development from 2005-2007 and served as the Acting Administrator of the U.S. Small Business Administration from 2008-2009.