Karen Mills - Faculty & Research - Harvard Business School
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Karen Mills

Senior Fellow

General Management, Entrepreneurial Management

Karen Gordon Mills is a Senior Fellow at the Harvard Business School and a leading authority on U.S. competitiveness, entrepreneurship and innovation. She was a member of President Barack Obama’s Cabinet, serving as the Administrator of the U.S. Small Business Administration from 2009 to 2013, and is an expert on the economic health and well-being of the nation’s small businesses.

Mills frequently provides analysis and insight on the small business lending market and its impact on the nation’s economy, including on the rapid growth of “fintech” online lenders, which she details in two working papers: The State of Small Business Lending: Innovation and Technology and Implications for Regulation (November 2016) and  The State of Small Business Lending: Credit Access in the Recovery and How Technology May Change the Game (July 2014). With a focus on the link between entrepreneurship and middle-class opportunity, she authored portions of the U.S. Competitiveness project’s reports The Challenge of Shared Prosperity and Growth and Shared Prosperity, as well as contributed to the University of Virginia’s Milstein Commission’s report Can Startups Save the American Dream?

Mills is President of MMP Group, which invests in financial services, consumer products and technology-enabled solutions sector businesses. She currently serves as a director of several fast-growing entrepreneurial companies, including First Aid Beauty, and is Vice Chair of Envoy, an immigration services provider. She is Chair of the Advisory Committee for the Private Capital Research Institute and serves as a co-Chair, with former U.S. Senator Olympia Snowe, of the Bipartisan Policy Center’s Main Street Finance Task Force. She is a member of the Council on Foreign Relations and the Harvard Corporation. She was previously a Senior Fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School and is a past Vice Chair of the Harvard Overseers.

In Obama’s Cabinet as SBA Administrator, she served on the President’s National Economic Council and as a key member of the White House economic team. At SBA, she led a team of more than 3,000 employees and managed a loan guarantee portfolio of over $100 billion. Mills is credited with turning around the agency, streamlining loan programs, decreasing processing times and reducing paperwork, which led to record-breaking years for SBA lending and investments in growth capital. Additionally, Mills led efforts to help small businesses create regional economic clusters, gain access to early-stage capital, boost exports, and tap into government and commercial supply chains.

Prior to SBA, Mills held leadership positions in the private sector, including as a partner in several private equity firms, and served on the boards of Scotts Miracle-Gro and Arrow Electronics. In 2007, Maine Governor John Baldacci appointed Mills to Chair Maine’s Council on Competitiveness and the Economy, where she focused on regional development initiatives, including a regional economic cluster with Maine’s boatbuilding industry.

Mills earned an AB in economics from Harvard University and an MBA from Harvard Business School, where she was a Baker Scholar. She is a recipient of the U.S. Department of the Navy’s Distinguished Public Service Award, and is a frequent guest on news outlets, including Bloomberg radio and TV, and opinion writer, with recent placements in Fortune, Forbes, The Hill, Harvard Business Review and American Banker.

Journal Articles
Working Papers
  1. The State of Small Business Lending: Innovation and Technology and the Implications for Regulation

    Karen Gordon Mills and Brayden McCarthy

    Small businesses were among the hardest hit in the Great Recession, accounting for more than 60% of the total jobs lost. The economic crisis was one focused on the banking sector, which is one reason for the disproportionately high impact on America’s small businesses, which tend to be heavily credit dependent. While some aspects of the economy have recovered in the years since, small businesses have struggled, primarily due to a lingering credit gap that is the result of banks being less likely to make the smaller dollar loans—those less than $250,000—that small firms (more than 70%) seek. A rapidly growing financial technology (fintech) sector has quickly stepped in to fill this gap, and incumbent banks are exploring a variety of partnership strategies with the new entrants. Yet, while the much needed increase in sources for financing has been welcome by small businesses, these innovative fintech lenders have sparked concerns around transparency and the high costs charged to borrowers. These concerns are exacerbated by a “spaghetti soup” of regulators, where no one federal entity has oversight, and protections around small business borrowing slip through the cracks. This paper takes a detailed look at the current state of small business lending, the causes for the persistent low-dollar loan gap, the solutions being driven by innovative fintech lenders, and the key concerns around oversight and regulation. Finally, our objective is to provide regulatory recommendations that will protect small business borrowers and not dampen the innovation that has proven so promising for filling the gap in small business access to credit.

    Keywords: Small Business; Financing and Loans; Financial Crisis;


    Mills, Karen Gordon, and Brayden McCarthy. "The State of Small Business Lending: Innovation and Technology and the Implications for Regulation." Harvard Business School Working Paper, No. 17-042, November 2016.  View Details
  2. The State of Small Business Lending: Credit Access During the Recovery and How Technology May Change the Game

    Karen G. Mills and Brayden McCarthy

    Small businesses are core to America's economic competitiveness. Not only do they employ half of the nation's private sector workforce—about 120 million people—but since 1995 they have created approximately two-thirds of the net new jobs in our country. Yet in recent years, small businesses have been slow to recover from a recession and credit crisis that hit them especially hard. This lag has prompted the question, "Is there a credit gap in small business lending?"
    This paper compiles and analyzes the current state of access to bank capital for small business from the best available sources. We explore both the cyclical impact of the recession on small business and access to credit, and several structural issues that impede the full recovery of bank credit markets for smaller loans.

    Keywords: Small Business; Financing and Loans; United States;


    Mills, Karen G., and Brayden McCarthy. "The State of Small Business Lending: Credit Access During the Recovery and How Technology May Change the Game." Harvard Business School Working Paper, No. 15-004, July 2014.  View Details
Cases and Teaching Materials
  1. The Maine Food Cluster Project

    Karen Mills

    The case introduces Craig Denekas, the head of the Libra Foundation, an unusual, private foundation based in Maine, which owns three locally based food companies. Denekas has initiated a project to explore how to grow the food sector in Maine, benefiting not only Libra’s food companies but also other Maine businesses and workers and the overall Maine economy. The exploration shows a large food sector with significant employment and a network of over 100 largely uncoordinated food industry organizations. Other states and nations have formed food cluster initiatives to help their agriculture and food businesses innovate and grow markets for their products. Should Denekas and Libra try to organize a cluster initiative? How would he get started? Who would be the important actors? How would he measure success? This Teaching Plan is designed to be used in conjunction with the case “The Maine Food Cluster, Project,” HBS No. 316-008.

    Keywords: Maine; clusters; food; Libra Foundation; locally-based companies; food industry; Development Economics; Industry Clusters; Food; Food and Beverage Industry; Agriculture and Agribusiness Industry; Maine;


    Mills, Karen. "The Maine Food Cluster Project." Harvard Business School Teaching Plan 317-107, March 2017.  View Details
  2. The Maine Food Cluster Project

    Karen Mills and Aldo Sesia

    The Libra Foundation is exploring how to grow the food sector in Maine using the strategy of creating a food cluster initiative. Maine is one of the poorest states in the United States and the food sector is one of the largest employers. Multiple efforts in agriculture, aquaculture, and food processing exist but are not coordinated. The Foundation owns three food companies. Its CEO needs to decide what action if any the Foundation should take given the data from the Cluster Tool—a nation data set and other research on successful food cluster initiatives in other states.

    Keywords: Development Economics; Food and Beverage Industry; Agriculture and Agribusiness Industry; Maine; Vermont; Oregon; Denmark;


    Mills, Karen, and Aldo Sesia. "The Maine Food Cluster Project." Harvard Business School Case 316-008, October 2015.  View Details
  3. The Grommet - Video Supplement

    Lynda M. Applegate, Karen Gordon Mills, Lena G. Goldberg and Annelena Lobb

    Keywords: entrepreneurship; e-commerce; product launch; retail; Online Technology; Entrepreneurship; Product Launch; Retail Industry;


    Applegate, Lynda M., Karen Gordon Mills, Lena G. Goldberg, and Annelena Lobb. "The Grommet - Video Supplement." Harvard Business School Video Supplement 815-703, November 2014.  View Details
Other Publications and Materials
  1. A New Categorization of the U.S. Economy: The Role of Supply Chain Industries in Performance

    Mercedes Delgado and Karen G. Mills

    Supply chains have been an important part of the discussion of the American economy. However, this discussion has lacked an empirical definition of who are the suppliers and this has limited our understanding of their role in national performance. This paper introduces a new industry categorization that separates Supply Chain industries (i.e., those that sell their goods and services primarily to other businesses or governments) from Business-to-Consumer (B2C) industries (i.e., those that sell primarily to consumers). Our analysis uses the 2002 Benchmark Input-Output Accounts from the U.S. Bureau of Economic Analysis to identify Supply Chain and B2C industries. Using this categorization we examine the supply chain economy during the 1998–2013 period across several metrics: the number of firms, employment, wages, labor occupation composition, patenting, and growth dynamics. We find that supply chain industries comprise a large segment of the economy. In particular, there are many suppliers of traded services both in terms of employment and number of firms. Supply chain industries, especially traded services, have higher average wages than other industry segments. This can be explained in part by the larger relative presence of STEM (Science, Technology, Engineering and Math) occupations in supply chain industries, and in particular in the suppliers of traded services (though non-STEM occupations such as accounting, finance, managerial, and logistics are also important to service suppliers). While STEM occupations are most prevalent in suppliers of traded services, patents are primarily concentrated in manufacturing suppliers. Together, these observations suggest that much of the U.S. innovative activity happens in the supply chain economy. We also find that the employment in the supply chain economy has been evolving away from manufacturing and towards services for the period under examination (1998-2013), with suppliers of traded services experiencing high growth in employment and wages. Finally, the analysis of the growth trends during the business cycles reveals that the supply chain economy is particularly susceptible to economic crises (2001-2002; 2007-2009). Overall, our findings call for targeted policies that recognize that suppliers are a large segment of the U.S. economy, are a mix of manufacturers and service providers, have a diverse and distinct set of labor occupations, drive innovation, and are vulnerable to crises.

    Keywords: Supply Chain Categorization,; Economics; Corporate Entrepreneurship; Service Industry; North and Central America;


    Delgado, Mercedes, and Karen G. Mills. "A New Categorization of the U.S. Economy: The Role of Supply Chain Industries in Performance." Paper presented at the Industry Studies Association, Minneapolis, MN, May 2016.  View Details
  2. Growth & Shared Prosperity

    Karen G. Mills

    In June 2015, nearly 75 experienced leaders from across business, government, labor, academia, and media gathered at Harvard Business School to discuss a topic of increasing concern in America: How can our nation continue to remain competitive while also providing a path to prosperity for more citizens? This report highlights the group's deliberations and summarizes the HBS research that was presented during the convening.

    Keywords: shared prosperity; Wealth;


    Mills, Karen G. "Growth & Shared Prosperity." Report, U.S. Competitiveness Project, Harvard Business School, Boston, MA, September 2015 (With contributions from Joseph B. Fuller and Jan W. Rivkin.)  View Details
  3. The Challenge of Shared Prosperity: Findings of Harvard Business School's 2015 Survey on U.S. Competitiveness

    Jan Rivkin, Karen G. Mills and Michael E. Porter

    In the 2015 survey on U.S. competitiveness, HBS alumni weigh in on the current state and future trajectory of U.S. competitiveness as well as the structural strengths and weaknesses of the U.S. business environment. In addition, alumni delve deeper into two aspects of competitiveness: the health of entrepreneurship in the U.S. and business leaders' views on shared prosperity. Alumni are optimistic about the ability of U.S. firms to compete globally and they see entrepreneurship as more accessible today than it was a decade ago. But they doubt that firms in the U.S. will be able to lift the living standards of the average American. Alumni report that rising inequality, middle-class stagnation, economic immobility, and limited economic mobility are problems for their businesses, not just social issues. Business leaders would like to see the future gains in prosperity spread far more evenly among Americans than recent gains have been distributed.

    Keywords: competitiveness; U.S. competitiveness; shared prosperity; Wealth; Competition; United States;


    Rivkin, Jan, Karen G. Mills, and Michael E. Porter. "The Challenge of Shared Prosperity: Findings of Harvard Business School's 2015 Survey on U.S. Competitiveness." Report, Harvard Business School, Boston, MA, September 2015 (With contributions from Michael I. Norton and Mitchell B. Weiss.)  View Details
  4. Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economics

    Karen G. Mills, Elisabeth B. Reynolds and Andrew Reamer

    Keywords: clusters; competitiveness; cluster initiative program; regional industry; Industry Clusters;


    Mills, Karen G., Elisabeth B. Reynolds, and Andrew Reamer. "Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economics." Blueprint for American Prosperity, Brookings Institution, Metropolitan Policy Program, April 2008.  View Details