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One barrier to economic development can be the overwhelming and expensive process of compliance with regulatory requirements for small businesses. A Pink Zone — an area where the red tape is lightened — is the locus for implementation of lean strategies and improvements, and it identifies an area where new protocols are pre-negotiated and experiments are conducted, all with the goal of removing impediments to economic development and community-building. This paper provides ideas, tools, and strategies to create and sustain Pink Zones to foster entrepreneurship and small business growth.
America’s traditional economic development policy has raised important questions about equity, especially for new entrepreneurs. Entrepreneurs and small businesses bring economic stability into communities. To encourage economic development brought, it is imperative that the impact on small businesses and entrepreneurs be considered upfront when evaluating new ordinances and regulations. At the same time, public-private partnerships with established community businesses can help finance new ventures, as can establishing revolving community loan funds.
Small businesses are the lifeblood of the economy in the United States. Based on data from the U.S. Census Bureau, the Office of Advocacy at the U.S. Small Business Administration documented that small businesses accounted for over 92% of the net new jobs creation between 1989 and 2003. The smallest among the small businesses (those employing fewer than 20 employees) accounted for 85% of the net new job creation over the same period. In essence, the vast majority of the new jobs created in the economy come from the very small businesses. Of the total 21.8 million jobs created between 1989 and 2003, small businesses under 20 employees created 18.6 million jobs, small businesses with between 20 and 500 employees created 1.5 million jobs, and large businesses and companies (with over 500 employees) created only 1.7 million jobs. Similarly, while small businesses created net new jobs in 12 of those 14 years, large businesses eliminated more jobs than they created in 5 of those 14 years.
The Maine Center for Economic Policy (MECEP) was retained by the Portland Independent Business and Community Alliance to collect and analyze data related to the economic impact of businesses in Portland, Maine. The primary purpose of the study was to quantify the impact of locally owned businesses compared to national chains on the local economy. MECEP's analysis found that in general every $100 spent at locally owned businesses generates an additional $58 in local impact. By comparison, $100 spent at a representative national chain store generates $33 in local impact. Stated differently, MECEP found that money spent at local businesses generates as much as a 76% greater return to the local economy than money spent at national chains. These findings are consistent with similar studies conducted in other states and can vary by business type.
This report, which contains the results of a scientific national phone survey of small business owners (2 to 99 employees) conducted in March 2013, is designed to inform policy discussions about retirement security and serve as a basis for evaluating proposals that address the needs and concerns of small business owners.
Business incubators and accelerators have emerged as a popular strategy to support the growth of entrepreneurial ventures, especially in the high-tech sector. They are designed to address the networking, education and capital challenges all entrepreneurs face. These challenges are most acute for women and minority tech entrepreneurs, suggesting that incubators and accelerators could have the greatest impact on their ventures. Yet, women and minorities are not participating in high-tech incubators and accelerators at the same rates as their white, male counterparts. Given the growing commitment, by both public and private sectors, to increase the numbers of women- and minority-owned high-tech businesses, a critical step will be to make incubators and accelerators more inclusive of diverse entrepreneurs. In addition, because these organizations, particularly accelerators, are attracting many young entrepreneurs, the underrepresentation of minorities among the entrepreneurs they support is especially concerning given that 43 percent of millennial adults are people of color ("Millennials in Adulthood," 2014). Given this demographic trend, helping incubators and accelerators to become more racially inclusive is important to ensure that all future tech entrepreneurs are given the same level of support.
Minority-owned businesses play an increasingly important role in the U.S. economy. The nearly one million (996,248) minority-owned businesses with paid employees contribute $1.2 trillion in revenue and eight million jobs to the economy. Minority-owned businesses are especially important to inner cities—economically distressed urban neighborhoods characterized by high poverty and high unemployment rates— and minority wealth building. Building wealth for people of color in inner cities requires not only maximizing employment, but also supporting the development of more entrepreneurs in these neighborhoods and helping them grow their businesses. Entrepreneurship is a wealth building strategy and pathway out of poverty (Bradford, 2003; Gentry and Hubbard, 2004; Quadrini, 2000; Sutter, Bruton, and Chen, 2018). Supporting entrepreneurs of color in inner cities will build wealth and decrease unemployment and poverty in urban areas that need it most.
We examine how within-firm skill premia - wage differentials associated with jobs involving different skill requirements - vary both across firms and over time. Our firm-level results mirror patterns found in aggregate wage trends, except that we find them with regard to increases in firm size. In particular, we find that wage differentials between high- and either medium- or low-skill jobs increase with firm size, while those between medium- and low-skill jobs are either invariant to firm size or, if anything, slightly decreasing. We find the same pattern within firms over time, suggesting that rising wage inequality - even nuanced patterns, such as divergent trends in upper- and lower-tail inequality - may be related to firm growth. We explore two possible channels: i) wages associated with "routine" job tasks are relatively lower in larger firms due to a higher degree of automation in these firms, and ii) larger firms pay relatively lower entry-level managerial wages in return for providing better career opportunities. Lastly, we document a strong and positive relation between within-country variation in firm growth and rising wage inequality for a broad set of developed countries. In fact, our results suggest that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in employment by the largest firms in the economy.
A checklist document for obtaining licenses and permits for small business owners.
The intensification of economic inequality, one of the defining issues of our times, has many causes, ranging from the weakening of labor unions to the decimation of inheritance taxes. This report argues that another factor belongs on the list: subsidies given by state and local governments to large corporations in the name of economic development.