Want a More Vibrant Community? Bet on Small Business!
Mahatma Gandhi once said, “The best way to find yourself is to lose yourself in the service of others”. I would add this is very true of your local community. I read a report entitled, “Where Our Jobs Come From.” The author, Don Macke of the Center of Rural Entrepreneurship, made some observations every small or mid-sized community across the country should take to heart. Here are some numbers to think about:
1) Between 2006-16, 48 million net new jobs were created. This is a whooping 31% increase in jobs over this roughly ten-year period.
2) Stage 1 and 2 businesses (business from 1-99 employees) accounted for 95% of those 48 million jobs.
3) Stage 3 businesses (businesses from 100-499 employees) created 2.6 million jobs or the other 5%.
4) Stage 4 businesses (500+ employees) lost a million jobs in that same timeframe.
While we don’t have studies showing the past 6-7 years, it is safe to say, those numbers are still very relevant. It is true figures can at times present a false narrative. The above figures create a very compelling argument for hopping aboard the small business and entrepreneurship bandwagon. Statistics and reality tell us placing all our eggs in the basket of only courting large or medium manufacturing type businesses are going against great odds. That quest is fraught with a high percentage or dose of failure. There are over 10,000 communities across the country courting these larger businesses. The odds of success are between 1% and 2% on the high side. Those communities getting lucky in this courtship casino are usually advanced in their pursuit of infrastructure, quality of life building, and transforming their communities in other areas as well. For most, the odds are better to take the city coffers and invest in lottery tickets. Additionally, communities depending on this type of employer are setting themselves up to experience great loss when these businesses leave due to better offers, better tax incentives, offshoring, moving, or even shutdown.
The above numbers are priceless information to communities that understand and build future success on the reality of what is taking place in the economy. Don Macke also indicates over the next generation, between a third and half of all workers will be self-employed and/or part of this new gig economy which will be highly outsourced and entrepreneurial in nature. This was before COVID-19 which has only sped up this transition. Knowing these statistics should determine how your community proceeds in building their infrastructure, downtowns, and commercial zones.
Imagine your community right now with a third or half of the workforce self-employed. How would you plan differently for the future knowing this today? Would you be subsidizing new commercial space such as malls or large developments which may become albatrosses of the future? Instead, would you be thinking about high-speed fiber, Wi-Fi locations, and smaller office suites? These could be entrepreneur or innovation suites where multiple businesses or the self-employed might be able to locate with minimal space needs sharing the essential office services needed. Forward thinking city leaders might consider providing financial or tax incentives for this up-and-coming workforce that drives them to your community.
The future is rapidly approaching. The signs of the current glut of big boxes, malls, and chains have been showing chinks in their armor for years. COVID-19 only accelerated these trends. Communities clinging to the traditional revitalization strategies are destined for a disappointing future. Communities fortunate to have large employers are blessed. Treat them well as this adds balance in your community. Communities seeking to find their way in this challenging economic climate, the numbers are over-whelming telling you small and medium sized business development is the path to take.
America was built on the backs of small business. Small business has always been the road map to sustainable community success. Communities with the innovative mentality and attitude of the entrepreneurial spirit can survive while other communities that rely on manufacturing and big companies may wither on the vine with each economic blow or recession. The future of your community and future generations rest in the hands of the decisions and efforts you make today!
John Newby, Pineville, MO. is a nationally recognized Publisher, a Community, Chamber, Business & Media consultant, and speaker. His “Building Main Street, not Wall Street,” column is carried in communities around the country. The founder of Truly-Local, dedicated to assisting communities, their businesses and media to build synergies that create more vibrant communities. He can be reached at: info@Truly-Localllc.com.