Karen Gordon Mills is a Senior Fellow at Harvard Business School and a leading authority on U.S. competitiveness, entrepreneurship and innovation. She served in President Barack Obama’s Cabinet as the Administrator of the U.S. Small Business Administration from 2009 to 2013, and was a member of the President’s National Economic Council. She is an expert on the economic health and well-being of the nation’s small businesses.
Mills is a venture capitalist and the President of MMP Group, whose investments include companies in software services, food, skin care, and large-scale data analytics. She is the Vice Chair of Envoy, an immigration services provider, and a Director of Churchill Capital II and Clarivate Analytics. She also serves in leadership roles for several policy organizations, including as Chair of the Advisory Committee for the Private Capital Research Institute; Co-Chair of the Bipartisan Policy Center’s Main Street Finance Task Force; Member of the Council on Foreign Relations; Member of the U.S. Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee; and Director of the National Bureau of Economic Research. She is a Member of the Harvard Corporation and a past Vice Chair of the Harvard Overseers. She was previously a Senior Fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.
In Obama’s Cabinet as SBA Administrator, Mills was 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. At the height of the Great Recession, she took steps that led to record-breaking years for SBA lending and investments in growth capital. Additionally, Mills’ efforts helped 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. She has served on numerous public boards, including Arrow Electronics, Scotts Miracle-Gro, Triangle Pacific Corporation, and Guardian Life Insurance. 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 CNBC, with recent op-ed placements in American Banker, Fortune, Forbes, The Hill, and Harvard Business Review.
Fintech, Small Business & the American Dream describes the needs of small businesses for capital and demonstrates how technology—novel data sources, artificial intelligence, machine learning—will transform the small business lending market. This market has been plagued by frictions: it is hard for a lender to determine which small businesses are creditworthy and it is difficult for business owners to understand their own cash flow and prospects. Now the fintech innovation cycle is at an inflection point—new streams of data have the power to illuminate the opaque nature of a small business’s finances. The playing field is wide open, with technology companies like Amazon and Square, new fintech entrepreneurs, and banks—small and large—vying for a position. Fintech, Small Business & the American Dream grapples with the broad significance of small business to the economy, the historical role of credit markets, the dynamics of innovation cycles, and the policy implications for regulation.
As technology opens the doors to vast troves of data, opportunities are emerging to create new insights on a small business’s health and prospects. Insights from this data have the potential to resolve two defining issues that have faced lenders and borrowers in the sector: heterogeneity—the fact that all small businesses are different, making it difficult to extrapolate from one example to the next—and information opacity, the fact that it is hard to know what is really going on inside a small business.
The possibility that Apple Card applicants were subject to gender bias opens a new frontier for the financial services sector in which regulators are largely absent, argues Karen Mills.
Technology is changing financial institutions’ relationships with local businesses and sole proprietors, which account for half of America’s workforce. HBS professor and former head of the Small Business Administration Karen Mills sheds light on the ongoing transformation. Will new technologies expand access to credit for sole proprietors and small businesses on Main Street? How will these new technologies affect community banks? And what are the key challenges to smart Fintech regulation?
If you’ve used Venmo, Coinbase or Robinhood, then you’ve used Plaid, whose software links users’ bank accounts to these apps. Investors include the venture capital arms of Goldman Sachs and Google parent Alphabet. Plaid’s mission is to help consumers own their banking data by being able to more easily see their complete financial picture. This goal is part of an “open banking” movement, sweeping across the fintech industry.
It's very important for a small business owner to understand where their business is going, what's the customer need that they're going to meet, and how are they going to survive financially. What are going to be the resources that they're going to use to start the business? How are they going to generate the resources they need to stay in business and pay their employees? Mills notes that in the era of fintech, small businesses have more tools than ever to establish their foundation.
Karen Mills, former director at Small Business Administration, discusses the influence of smaller financial technology companies on big banks and how the U.S. government could help small businesses.
The former head of the Small Business Administration and current Senior Fellow at Harvard talks about her new book and how we are moving towards small business lending utopia.
Was Eastern Labs a huge success or an expensive mistake? Eastern Bank CEO Bob Rivers innovated from within by partnering with fintech entrepreneur Dan O’Malley to launch a completely automated small-business lending product. Karen Mills discusses key questions from her case study: Did Rivers have the right intrapreneurship model? Did he change the culture at Eastern? Did he make a mistake spinning off Numerated into a separate company?
David Mindell, Karen Mills and Robert Solow discuss what we can learn from past examples of massive disruption in the workforce. Which lessons apply today, and where might we be in uncharted territory.
April 11, 2018 - Karen Mills leads a discussion between Detroit Mayor Mike Duggan and JPMorgan Chase's President and CEO Jamie Dimon and Head of Corporate Responsibility Peter Scher for a discussion on cross-sector collaboration to drive economic opportunity in America's cities. The discussion, which was hosted by the John F. Kennedy Jr. Forum at the Harvard Kennedy School's Institute of Politics, looks at how partnerships like the one between JPMorgan Chase and the City of Detroit are succeeding at addressing community challenges and creating pathways to greater economic opportunity for individuals and families.
Policy Briefing: An alternative framework that focuses on the suppliers of goods and services to businesses and the government: the “supply chain economy.” Our research shows that by categorizing the economy into Supply Chain versus Business-to-Consumer industries, a different picture emerges.
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 in that impede the full recovery of bank credit markets for smaller loans.
In June 2015, 73 chief executives, mayors, governors, university presidents, economists, and thought leaders from across the political spectrum gathered at Harvard Business School to work on a question of deep and growing concern in the United States: How can our nation continue to grow while also providing a path to prosperity for more Americans? This briefing shares the highlights of the group’s deliberations.
