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A Strong Small Business Industry can improve a city’s economy #smallbusiness

The Initiative for a Competitive Inner City (ICIC) released a report comparing small business job creation with large corporations.  "The research, conducted with the support of JPMorgan Chase, was released on the heels of the bank’s announcement that it was committing an additional $75 million to its Small Business Forward initiative, recognizing the contribution of small businesses to economic opportunity and reducing unemployment, especially for women, minorities and veterans.“  The report covers five cities; Chicago, Dallas, Detroit, Los Angeles, and Washington DC, and focuses on small business job creation.  Small businesses were identified as companies with 5 to 250 employees.  All organizations 4 and under were identified as micro businesses.

According to the ICIC,  small businesses create over 50% of jobs in four of the five cities, "58 percent in Chicago, 53 percent in Detroit, 74 percent in Los Angeles and 62 percent in D.C.”  In Dallas the number falls to 48%.  Within the inner-city of these cities, small businesses create an even greater chunk of jobs, with “70 percent in Chicago, 64 percent in Detroit, 77 percent in Los Angeles and 74 percent in D.C.”  Again Dallas, is an outlier likely due to Texas’ heavy investment in its natural resources which make it hard for under funded organizations to exist.

With simple investment in the small business community, research has proven that in four of the five cities (not including Detroit), unemployment could be solved if each small business hired one additional employee.  The report concludes by suggestion five strategies to help bolster small businesses:

  1. Create a comprehensive small business plan connected to regional and city economic assets.
  2. Expand contracting opportunities for small businesses so that they can compete on procurement contracts with government and anchor institutions.
  3. Design workforce programs for small businesses, since many do not have the resources or capacity to recruit and train new employees (especially those with barriers to employment).
  4. Coordinate resources and ease burdensome regulations by mapping and making more accessible the resources that already exist.
  5. Upgrade the inner-city business environment by improving infrastructure and neighborhood amenities to support small-business growth.

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