Supporting cspan as a Public Service along with these other providers. Giving you a front row see to democracy. A discussion about the challenges and opportunities of Artificial Intelligence for Small Businesses hosted by the bipartisan center. Can you hear me now . Sorry about that. Technology jumped in and took away. Im not sure how much you heard. I am a board member at a Venture Capitalist here in washington, d. C. Running the office of investment and innovation. That is the oai as they call ita as you know, you have to have three letter acronyms wherever possible. You just saw some clips from the sba, i should say it is observation gathering on the economics of our nation. Seeming to get more press than anybody i know. Talking about not only the sba interspecific team and teammates , but also how technology and specifically ai and Machine Learning are affecting Small Business learning. Thank you for joining us today. It is a pleasure to be with you, mark. Lets get started with somehow speaking, so to speak. Tell ourve viewers what the offe of investment and innovation does. It is an incredible office. It is an honor and privilege to be a temporary steward of this office. Our mission, humbly, is to support ensuring that u. S. Entrepreneurs and Small Business owners founded the startup can get access to longterm equity to help them start, scale, grow and sustain incredible businesses that create jobs and improve the u. S. Economy more broadly. What is incredibly exciting about all of this, it is so much more than just capital. The capital is incredibly important. If you dont have capital, it is hard to do much else. But our office is also responsible for managing and administering the Small BusinessInnovation Research and Technology Transfer program. Those not familiar, they are programmed. We administer and support them among agencies. We work with those agencies to be supportive of providing contracts and grants to support prototyping, research, commercialization of cuttingedge technology. Incredible program that has been in existence for over 40 years and provides 4 billion of non diluted funding every single year to support innovation. Last and certainly not least, we run a portfolio Innovation Ecosystem support program. There are incredible organizations that cross public and private sector philanthropy andd Corporate Network to provie expertise and support to entrepreneurs that are building innovated companies. Incubators and accelerators. We work with networks to provide them with grants and prizes to fund their operation. We do that through something called the gross Accelerator Fund competition to our federal and state Technology Partnership programs. Also, we recently assumed responsibility for an exciting portfolio called the regional information cluster which will focus on an industry vertical or Technology Expertise in a particular area to support Small Businesses. So, like i said, it is a privilege to get to work on so many expanding missions and be able to have an impact for so many entrepreneurs and also to support them in building and create so many Job Opportunities well, i am obviously biased since i proceeded you by at least one administration, as they usedk to say. I think the program are bluntly not marketed well enough. If the common citizen knew the impact of where those funds that teare allocated each year throuh you and your teammates go and the impact it had on not just uttechnology or startups, businesses that we use every single day, i think they would all be amazed and super thankful for the publicprivate ownership value and energy that oai brings from a larger perspective, the sba has been the center of an unbelievable out pouring of capitalta during covid in the various programs. Has it combed down over at hq since all of the outflow of capital to help Small Businesses across the u. S. . You and i have not caught up about this. I am actually wearing a dual hat right now. I am serving. Very excited to act as the acting administrator for the office of capital access. In addition with the office of investment and innovation, i am also leaving our capital office. Working Capital Loans and Asset Based Lending but also all of our disaster lending programs including ppp and the idle programs. We are certainly at a different point in that journey and the incredible thing, i think that this is a great opportunity, the Brand Awareness off the sba has never been greater across america. With that, it prevents dash present manyen opportunities for us to extend our support, across our broader portfolio to be there to meet the needs of Small Business owners and entrepreneurs that are launching innovative startups across the country. You do have many had spirit that keeps you awesomely busy. I did not know, but congratulations, or maybe my condolences on adding all of that responsibility. I know that emergency and disaster funds have been particularly top of the news with allie and other arenas. I am sure our listeners do not realize how it is so important in these Disaster Recovery efforts. Give us an example of how they have been a real player and folks recovering from disastrous situations like the recent fire in maui. Yeah, so, it is interesting. I wasas naive with this before transitioning from the credit sector. We often think of fema immediately when there is a national disaster. Te but, the reality is, a large percentage and a greater percentage of Financial Support actually comes from the sba. They provide low cost loans to homeowners, Business Owners to be there to support them and to recover from national disasters. In addition to supporting them by getting access to capital that they need quickly and many otimes to recover from these situations, there are teams of boots on the ground to provide technical and support for local roprograms and philanthropy. I think it is something that everybody was worked there can be incredibly proud of. We take a whole agency approach and supporting recovery and we should just knowledge this is a really challenging and trying time for Small Business owners. Americans in their lives also affected by this. Just to remind our viewers of thwhich there is apparently a wonderful number, we will have q a. If you have a question, be sure to type it in chat. We will have a curated recitation of questions that i will present a little bit later in our conversation. Another 10 or 15 minutes or so. The idea, sadly in my opinion, a hidden partner in so many s important things that happened in Business Development and Disaster Relief that we just discussed. One of the things, i hope i phrase this delicately or in a way that does not sound confrontational. Not to you, but n to the government in general. Sometimes in governmentme agencs , not so much the department off defense which often gets the best technology, but the platform for best technology and handling data and et cetera can sometimes be a little bit behind the curve and other government agencies. Your interaction with Small Businesses, you would need to be , i would argue, you and your teammates need to be closer to the tip of the spear of where technology is taking Small Businesses and how they interact with their marketplaces. Artificial intelligence and Machine Learning are the n newet zone here. In the view of many it is either satan that will destroy e everything or the visitation f the great savior who will make our lives less drudgery filled, et cetera. What are some ways that you and your teammates are deploying ai or you are seeing Artificial Intelligence and Machine Learning affecting the Small Business arena. So, first, i certainly would not take your comments to be a criticism, butkn an acknowledgmt of what exists in appropriations between our different federal agencies. I think that we should all be so grateful that our Defense Department is so wellfunded and our National Security is paramount to everything else. Working properly in this country i will say that i think that we are all grateful that congress moved with speed and with the pandemic and providing funding to support the ppp program. With that also administrative funds to support the operations of the agency. I wouldld applaud, i think we would all applaud. For those that dont know, she also has previously served as chief of staff. She knew the inner workings of the agency quite well. She was able to move swiftly and understood the need for technology and modernization and improved nests to ensure that we could effectively get funding out the door rapidly to make sure that Small Businesses did not go under and we were able to save american jobs. That was in the massive investment in technology. She had invested heavily in modernizing on the technology front. I think we can also all admit that we are the least funded agency with cabinet level reference communications yet the sba has to meet the call and we are privileged to meet the call of supportingg over 33 million Small Businesses in the u. S. Businesses that create over 99 of newon jobs every single yearn this country. So, i could not think of an agency that needs more funding to ensure that we are able to meet those needs. One thing is inevitable. We know that that is changed. We know that that is changing technology. We go through periods where change happens very rapidly. The Technology Innovation cycle only seems to speed up which is exciting, but, it also present risks and considerations. With that, it requires support, technology and to be able to secure technology that we need to effectively meet the needs of Small Businesses. Also to not introduce security risks. Also taking many steps to improve cybersecurity at the agency by leveling up the role of our Cyber Security officer within the agency. Additionally, though, incredibly customer centric and technology forwardte. She actually launched an incredible pilot program. Awarding partners and the region just announcedtn more funding ad more partners. That way we can be there to meet their needs. The complexity continues to grow meet them where they are. Understand their needs and help them gain access to tools. I would say one of the things that is incredibly exciting is the launch of a Publicprivate Partnership that we have for the ceSmall Business digital alliane where several large corporations microsoft and others to provide a Small Business and entrepreneur with the tools that they may need to be able to start adapting to years of Artificial Intelligence tools and technology more broadly. Safely and securely. You mentioned, i am just the reasonable president of the fan clubar. Execution has been my perspective has been valuable and just knowing how to operate but also to describe the needs of the machine and other funding arenas and implement those conversations into improvements. So, congratulations to all involved in particularly, the administrator. This idea of engaging Large Technology companies, you named a few of them there and they are the big ones. Helping provide toolsets and feedback and productive uses of ai and ml, this seems to be the way that the sba has always led, i think in Public Private partnerships. I guess the first challenges i would argue you are facing is just a database challenge alone. You interact with so many customers, so many businesses, so many grant recipients, et cetera, just generating the database who did what and who receive what appeared many Different Things in the wedifferent programs. The federal government we collected a lot of collective. With that we have the information. But it also begs the question about how can you use that information it howse can you use it for the right purposes to the benefit of Small Businesses. The benefit of policymaking to have better programs and better solutions. That is a big challenge. How do you structure the data. How do you use more advanced systems and technology. How do you think about the use of, you know, Large Language Models to support adaptive learning and training on the data so that way we can have better insights. Moving with this technology in the right way. We hear people will talk a lot about fear and we do need to think about security. At the same time, technology will always be changing. You are either leading change or you are responding to it. So, we have to think about how do we lead responsibly. But that we are thinking broadly about the needs of the different stakeholders. How do we remove and ensure that we are collecting truth and facts and using that to make informed decisions. Using that information to make informed decisions of all of our programs. There is a big build up in theen agency to have a more customer centric view and more customer centric support. So, that means connect the dots broadly across programs. I think that it is very exciting the potential that that presents for us to be more customer centric in terms of our delivery it is a different world than we have operated in the past. And it is one that will create many efficiencies that we are able to invest in those improvements and enhancements for thehe agency. Also going back to the earlier point of how the agency has traditionally embarked on Public Private partnerships, i think that we do that really well. What i would also say is this great enthusiasm is the support that we had broadly from the white house and also from leadership at the agency and other agencies as well is support for the broader ecosystem stakeholders beyond this large corporation. A network of over 1700 financial to provide loans to Small Businesses. On the investment side, we partner with over 300 private funds. That is a lot of large and small Asset Management firms. They have investors that are there working with entrepreneurs helping them get access to funding and access to networks. All sorts of relationships and also throw a sense of our partnership with agencies that we work within our innovation programs. I am really delighted and looking forward to the opportunities and incredible storiesnd. I anticipate we will see these coming out of our recently formed a partnership. Or i should say growing our partnership with the Defense Department. So our relationship with the office of Strategic Capital, not only will we be be working on these opportunities, but, now, we will be aligning our Investment Program to create opportunities for private funds to work with s va to get capital from sba, but also to get value add support to the department in the office of Strategic Capital to help them get access to phds and subject Matter Experts on technology that is critical to our National Security to support the American Investment in tech elegy such as trusted ai is one example. But also quantum computing. Hypersonic viewed renewable energy. Not these things that the department of defense is seeking to secure, it is the technology that we want to build here in the u. S. Have jobs created in the u. S. Support the innovation here in the u. S. So, again, we are leading change and not responding to change. We have leaders across our country both public and debit sectors that are informing how we use technology. So they are improving. Just a reminder. We will have some q and a. I will be reflecting some of the question somere of the folks putting the child in just a minute. We have a couple already teed up the before we get to those, they are prettyy predictable, as you may suspect. I am interested in one of the, sort of the biggest worries that you keep hearing around Artificial Intelligence and Machine Learning. It will eradicate a whole chunk of jobs. I note that jobs and job growth, sba has always proudly carried the bond in the banner that Small Businesses are in fact job creation the job maintenance at the United States far beyond the megacorporations. This idea of ai, this carnivorous ones and zeros engine that will take away all of these jobs that people currently employ, are there ways that you and your colleagues at the department ofos labor or otr agencies are at least paying attention to some of the sectors that may be at most risk as ai is deployed more and more into our society . We think about the agrl revolution, the industrial revolution. You think about the use of Computing Power broadly. In different periods of time, this has led to changes in terms of the types of jobs tha in terms of the types of jobs that people have. It would be insensitive to say oh gosh, this would not lead to any job loss. Throughout history we have seen certain types of jobs have been replaced, but consistently again and again what weve seen is that as we see technology improvements, if human beings, governments and corporations make the right choices about the use of technology and how to govern it and to what objectives their needs are, it leads to more inclusive equity. It leads to opportunity for people to develop skills, cree new companies, create new Job Opportunities through these. So that way through generations we see new opportunities presented for the next generation that did not exist before. You think about people being on farms and working in the fields, and then going to work in factories and move to cities, and then creating networks insistently to other opportunities. We will always be evolving, but the key is with focus on how we use technologyhe to improve the human condition which means creating opportunities for purposeful work andti Economic Growth and more inclusive equity in the process. Well said. As a usage of tell people, shift happens, important job that asked and there is one might say. This idea of job loss, job creation i think your analogy is spot on. There are many analogies that appellant to the one you just suggested in the media specialist been a lot of my time radio going to tv going to cable and vcr, everything was goingo kill the prior media but, in fact, an overthetop we have streaming. It generates fresh perspective fresh opportunity and often fresh revenue. Ti one thing that would be a question from the crowd, crowdsourcing the question so to speak is that ai and ml is a natural source of funding for startups in ai and ml. So theres a whole raft of companies as as a vc i see ta lot all wrapped copies have sprung up and either gallery ruppercaseletter pursuing capital for ai or technology surrounding and i come for ll in management, for Machine Learning. How are some of the startups, what are you should be an easy question i hope. What are some ways these startups can approach the sba for funding . If i have statistics right and i may have changed recently because a lot has gone into the space but only in the first half of this year over 40 billion went into funding Vc Backed Companies and Artificial Intelligence, right . When you think about chatgpt and it was what 1 billion of funding. With with a mess about the funding going in this space. I would also say in many ways to think about this like the changes weve seen in terms of the use of Computer Software and the growth. There are so many different applications and some of these companies are going to focus in very discrete issues, very discreet markets. Some are going to be looking at broader opportunities and applications. Ill go back actually when answering your question about ways we might get funding from sba and actually talk a little more about our partnership with the Defense Department under the fdic, Critical Technology e,initiative. Trusted ai is one of 14 Critical Technology areas called out in this initiative. Whats really compelling due to several regulatory reforms that we advance in the fdic program, reform to ensure that sba could effectively provide matching capital to vc funds. So we provide a loan to a fund to match private capital. Since its a long we dont take any profit which can make the return profile more compelling. There will be opportunities for funds that are focused in this area to apply for licenses under the fdic initiative and not only get funding from us which could provide Downside Protection to the funds and approve the return but the get value add support to the relationship with the Defense Department and access to subject Matter Experts and phds in the department that are focused on trusted ai. I think that really is an elegant and exciting solution that we are seeking to advance for businesses that are getting funding from vcs in this area. Its a Broad Partnership with lots of stakeholders, but that way the vcs and the company set of connectivity into the federal government and the Defense Department to understand the ways that were thinking about advancing these technologies, objectives in these cases, is really exciting. Beyond that, many of these companies in addition to taking Equity Funding from Venture Capital funds often take venture debt, right . We guessing that Market Experience some major challenges since the collapse of Silicon Valley bank and some of the other primary venture lenders over this past spring and summer. What is exciting is that administrator guzman noticed some interesting patterns with ppp, right . And what did we hear from industry works and from both sides of the aisle as well. What we heard is that it was wonderful that these emergency funds were quickly able to get out to many businesses but we were leaving behind the innovation economy, Small Business and startups because of a longstanding regulation related to affiliation and control that considered, even though you are a Small Business, if you had taken on Equity Funding from private funds, you were not eligible to get funding. You had to have bootstrapped thl business and be able to self fund it in order to get funds from the sba. Can we just say, thats great for those businesses, but what if youre not independently wealthy . What if you had to go and seek funding in the form of equity to get your business launched . Because you did have a bank account large enough to support employing people and growing that business and buying new tack. It seems a shame that we would not provide federal loans to businesses, and so many thanks to the those who spoke up to make sure we find a way to make sure these companies dont go under, these copies are driving innovation which creates a passport or jobs in u. S. , new jobs. And so an exemption was put in place so those businesses could get access to ppp loans. Thise past spring, learning frm that we advance regulatory reformsti to remove the same restriction on affiliation control and are working Capital Program and are 504 loan program, our assetbased loan program. Why does that matter . It matters a great jeni because startups and innovation economy businesses do not have the same level of access to loans after the collapse of many of the venture lenders. The opportunity for those businesses now to get a lowcost government guaranteed loan from a wide network of lenders in communities and regions internationally could be transformative, absolutely transformative, particularly in our environment. So as ambassador rahm emanuel nc160 never let a good crisis go to waste and a think its tragic but it is certainly to that covides unveiled horse wouldve revealed some of the handcuffs that for whatever reason they were originally put in probably made sense at the time but those had handcuffs to your examples, handcuffed capital to folks and you get that made sense at the time. We have a few minutes left and i was going to read a question that just came across that i think is aio particular interest to many of our call today. The questioner says are there any concerns about the risks ai might post a minorityowned businesses or their communitiesh that might make them hesitant to adopt Ai Technologies that could prove beneficial . If so, what policy measures if any do you think might help support those Business Owners with the adoption . So its an excellent question inha that with changes in technology broadly and with ai, right, they key is that we have to figure out how to advance the technology a responsibly so the objectives are clear, that it is not benefiting a few, that we are considering the needs of communities and stakeholders broadly, that biases are not built into thehe system. Its incredibly important that we figure out the government framework for that way there can be trust. Because if there is trust and if there is an understanding of the framework and the objectives and that the needs and opinions of a broad base of stakeholders is considered, we will be able toer advance the technology for the greater good of humankind. This level o of coordination iso necessary and critical. What we do not want to see is that technology in the hands of a few making decisions for all, right . We need to figure out how to democratize these tools broadly and responsibly to benefit communities and different industries. I am really optimistic about the way that the administration broadly is thinking about this and how we are engaging and focused on Building Trust and responsible development, and also moves that administrator guzman has made your Small BusinessAlliance Partnership and all through our network of partners to make sure that were providing the resources to can induce broad and not just enact a subset of markets. So my last question is not a gotcha question and its kind of a lightning round but it is an unfair one, i will warn you right now it is unfair. Hi one thing about ai most compelling is pattern recognition and take a large amounts of conclusions of the pattern, patterns that the software can conclude. Obviously you and your colleagues deploy lots of capital to different types of businesses in different places, and different arenas, different silos of business, come differt types of ownership structures. At some point ensure somebody will say to you why dont you use. Pi to figure out what kindswh of businesses to best in what geographies of what ownership structures, almost as unpredictably, like a Venture Capitalist is supposed to wendy deploy capital to limited partners. Is that on the horizon or when you remain effectively above the conclusive fray of decided what types of businesses get capital from the sba . So its a moral, and ethical question as well as a question of the bounds of Technology Today and technology in thelo future. Some folks at eliciting might know the term that the talk a lot with ai about the fact that weve gotten alignment problem, right . And that unlike when youre using structured data only and you are doing rulesbased development with large data sets and the use of neural networks, you dont know necessarily how certain conclusions are reached by ai. You have information revealed to you. There is a need, and i dont see the need going away anytime soon for human judgment, human ethics, morality and principles. Data is interesting to analyze and inform, just because we get certain information sent to us doesnt mean that its right. We should consider information but we also need to check that, and we need to layer in human intelligence. Ais. Gov the love of human intelligence. We chatgpt is like the size of a a these brain and chatgpt four is a world brain and we are nowhere near the potential of the human brain yet. Cytomel about you but i dont want [inaudible] well said, bailey devries. Its been an honor to have you with us. Bailey devries runs office of investment innovation. Among many other offices at the sp. We really enjoyed a conversation and on behalf of the Bipartisan Policy Center i want to thank you for joining us. Thank you, mark. And i want to say it is a privilege having the baton pass from you and a number of other leaders and we are stewards for short prep time at this great nation that was started during the eisenhower administration, to ensure the capital and support were going to innovative Small Businesses and Small Businesses broadly across the country to make sure that they can go and create jobs. So thank you for all you did for i was in this seat. Im onlyble to do what im doing because of greatly to before, so thank you. Today policy advocates test but always to protect children from online sexual abuse and sex trafficking. You can watch the house judiciary subcommittee hearing live at 2 p. M. Eastern on cspan at three, cspan now our free app, or online at cspan. Org. 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