Jeffrey Clark does not minimize the difficulties Rochester’s small businesses face in an economic environment clouded by uncertainty. But Clark, president of the Small Business Council of Rochester, thinks the Rochester region and its broad base of small firms are well-positioned for growth. "We have a spirit of innovation and entrepreneurship that encourages business risk-taking and wealth creation," he says. A Rochester native, Clark is a graduate of Le Moyne College and received a finance MBA from the Simon Graduate School of Business at the University of Rochester. He has been a Bank of America Merrill Lynch senior client manager since 2003. Clark offered his views on a range of issues in an interview with Rochester Business Journal editor Paul Ericson.
ROCHESTER BUSINESS JOURNAL: With the so-called fiscal cliff looming and the likely outcome of the presidential election highly unclear, there’s a great deal of uncertainty in the air these days. In your view, what impact-if any-is this uncertainty having on the local economy?
JEFFREY CLARK: The impact of uncertainty is inaction. For example, if a business owner is uncertain how health care reform may look under a new administration, she may choose to wait to make a decision on hiring additional workers until she has a better idea of the benefits expense associated with new hires. There are many instances of when a business owner may wait to do something-buy new equipment, construct a new headquarters, expand overseas-until she has a better sense of how the legislative environment may look down the road.
RBJ: More generally, how do you see the state of small business in Rochester now?
CLARK: Fortunately, our local economy has not only survived the Great Recession but has actually grown over the past few years. And most of the indications suggest this relative health will continue. According to figures reported by the U.S. Bureau of Labor Statistics through April 2012, Rochester ranked 40th in the top 100 largest metropolitan areas for private-sector job growth, adding 7,100 jobs in the year-over-year period. And the Brookings Institution ranks Rochester the 46th-best metro economy in the world and third-best in the United States, based on 2010-2011 growth rates for employment, income and output of goods and services. And growth like this is often fueled by the small-business segment of the economy.
RBJ: Some believe that for the recovery to strengthen, small companies need better access to credit. As an executive with Bank of America here, you have a firsthand perspective on this. In your view, is there sufficient credit available to small firms?
CLARK: Most banks in our area, both large and small, have adequate capital reserves and balance-sheet capacity to allow for active lending. Bank of America, for example, had Tier 1 capital of $165 billion under Basel I and a Tier 1 capital ratio of 13.80 percent for the period ending June 30, 2012. We extended $68.4 billion in U.S. commercial non-real estate loans in the second quarter of 2012. And we originated approximately $4 billion in new small-business loans in the first six months of 2012, up 23 percent from the year-ago period.
The challenge is perhaps more on the demand side than the supply side. The "uncertainty equals inaction" discussion we touched on above is negatively impacting loan demand. And compared to prior years, a more stringent regulatory environment has raised the bar from a credit-quality perspective. So overall, I don’t believe lending capacity is having a material impact on credit production.
RBJ: Where do you see the strongest growth right now, in terms of the local small-business community?
CLARK: We have a thriving optics/photonics sector in our area, one of the lasting legacies of the Big Three. And this sector includes companies of all sizes. Technology transfer and commercialization initiatives from our excellent colleges and universities continue to drive technological and health-care-related small-business growth. The telecom industry also continues to drive job growth in our small-business community. And our service sector is world-class, with marketing and ad agencies, accounting and law firms that rank among the best in the nation. And this is just to mention a few of our areas of economic strength.
RBJ: How long have you been a member of the Small Business Council, and how has it played a role in your professional life?
CLARK: I’ve been involved with the SBC for over 10 years and have had the good fortune of watching and learning from the talented leaders that preceded me. The SBC also provides great networking opportunities, and I’ve made personal and professional connections that will last a lifetime.
RBJ: What are some of your chief goals as SBC president?
CLARK: Grow the SBC’s advocacy efforts in support of small business, expand our networking programs and increase participation in them, and in general ensure that the SBC remains Rochester’s premier organization focused on supporting small-business success.
RBJ: I know that the Boot Camp Series is among the most popular educational opportunities available to SBC members. What are some of the other top programs and benefits?
CLARK: As I’ve noted, we conduct many informal networking events designed to get small-business owners and managers in the same room at the same time to exchange ideas. Our Headliner event allows our members an opportunity to learn from nationally recognized business leaders. Our new Decision Makers Forum gives our members access to local and regional subject matter experts on a variety of compelling topics in a very intimate setting. And our upcoming Business Person of the Year Gala Luncheon is the area’s largest celebration of small-business success.
RBJ: Are there any new initiatives or programs that you’d like to pursue?
CLARK: We’d like to facilitate a way for small-business owners to gain easier and better access to their elected officials at all levels of government to discuss their concerns and challenges. Such an arrangement, I think, would benefit both our elected leaders and small-business owners.
RBJ: Small-business owners often cite the burdens placed on them by government. Have you seen any improvement at the state level over the past few years?
CLARK: Certainly there’s a renewed spirit of cooperation and bipartisanship in Albany, for which the governor deserves much of the credit. But the same challenges, led by the overall cost of doing business, that consistently put New York State at or near the bottom of the list of business-friendly states remain.
RBJ: What are SBC members’ top concerns in Albany right now?
CLARK: Health care reform would top that list, followed closely by the pressures brought on by excessive regulation.
RBJ: What about at the local level? Should government be doing more to support small business?
CLARK: One would like to think that government could be doing more to support small business, but it’s the nature of that support that’s open to debate. Reducing the cost of doing business in New York State is something I think we all agree would be beneficial. I believe the city and counties in our area, through their respective economic development arms, have done a darn good job of providing meaningful support to our small-business community.
RBJ: In your view, what key challenges are small companies here likely to face over the next few years?
CLARK: To name just a few, and in no order: finding quality skilled workers, managing health care costs and driving growth in these economically challenging times.
RBJ: Are you generally optimistic or pessimistic about the prospects for small businesses-and the broader local economy-over the next few years?
CLARK: I’m very optimistic. We have a skilled and educated workforce, a tremendous quality of life and a culture of cooperation across government, labor and private industry that fosters economic growth. Plus, we have a spirit of innovation and entrepreneurship that encourages business risk-taking and wealth creation. For that and many other reasons, and in spite of the many obstacles all business owners face, our region is positioned well for sustained growth.
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