SAN FRANCISCO (CBS 5 / KCBS) — Government has helped nurture new business since the Great Depression, but is now withdrawing from that role, a leading ethnic Chamber of Commerce official said Wednesday.

Dennis King, executive director of the Hispanic Chamber of Commerce in Silicon Valley, said the fiscal crisis afflicting all levels of government is hurting small business start-ups by drastically curtailing economic development activities.

“In San Jose, most neighborhood business associations had support from city government,” King said, in a meeting with the CBS San Francisco Editorial Board. “They don’t get that support any more, and they are collapsing.”

King noted that 22 of California’s 35 Small Business Development Committees, which formerly received some funds from community colleges, no longer do. SBCs can provide critical guidance to new businesses as they navigate the challenges of developing products, building sales and adding employees.

Chambers of commerce need to fill the development vacuum left by government, King said, but he added that traditional approaches, which emphasize antipathy to government, won’t be adequate.

“Too many chambers want to protect the status quo by acting as a shield against government intervention: lower taxes, less regulation,” he said. “They face a decision whether to be governments in exile or to get serious about collaborating.”

In an hour-long discussion, King also said:

§ There are encouraging indications the Silicon Valley economy is recovering, but not in the small-business sector. “We hear companies say they are turning around, and when someone like Google is going to hire 6,000 more people, it’s a good sign. And traffic is getting thicker – that’s another indicator,” he said. “But most small businesses have not seen the turnaround. I just helped a good friend close her restaurant last week.”

§ The Hispanic Chamber is disappointed with the Obama Administration’s failure to pursue immigration reform more aggressively. “The issue has fallen from the agenda. The number of deportations is not terribly different from the previous administration,” he said. “We are having a dialogue with the Administration that we hoped to resolve before the election campaign, but now we’re in the campaign.”

The CBS San Francisco Editorial Board is composed of staff members from KPIX-TV and KCBS-AM-FM. The board meets monthly with leaders from government, business and community organizations.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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