If your idea of the “good life” includes vitality, action, challenge, adventure and forward movement, then you are ready to analyze your local economy!  The life of a local economic system must be vital and filled with new ideas, growth and forward motion, and the alternative is stagnation.  In this way, local economics somewhat parallels our outlook on life.

Now you may be one of those who favors peace and quiet, a restful environment and as little change as possible.  That may work for some, but it can lead to boredom and a lack of productivity.  Study after study has demonstrated the link between remaining active mentally and physically to a longer, healthier life.  Much the same is true of a local economy.

If forward movement is what you value, then entrepreneurship is the heart of the economy, be it locally, regionally or nationally.  For it is the risk takers, the creative thinkers and the innovators who serve as the entrepreneurs that spur the heartbeat of an economic system.  Likewise, it is that spirit of entrepreneurship and innovation that makes the difference between a vibrant, spirited community and a moribund locale.

Even 50 years ago, an MIT study found that the biggest difference between healthy communities and those in economic decline could be found in the birth rates of new businesses.  Numerous subsequent studies suggest that the most consistent facilitators of economic and job growth are smaller businesses.

Surprisingly, very qualified people in the economic development space have long undervalued the importance of entrepreneurship, innovation and small businesses in sustaining and growing local economies.  Often, economic development departments, local elected officials, and others celebrated the periodic “big splash” of a new, large company yet overlooked the steady growth that came from encouraging entrepreneurs and sustaining smaller local businesses. 

Fortunately, this trend has changed dramatically over the past decade, and many states and localities now spend about as much on business retention and expansion as they do on seeking new investment. More and more communities are paying close attention to their existing business bases, nurturing entrepreneurship, and spurring the growth of small businesses in their area.  This is somewhat remarkable, given the lower profile of such efforts and the perception that there may be “less bang for the buck” in these endeavors.

Yet it is small, locally grown businesses that largely make up the heart of a local economy, businesses whose hearts and souls are tied to their home county.  Their owners tend to live in that same community and identify with the county, town, or village in which they are located.

How Can We Help?

Small businesses can benefit from all kinds of resources.  Some are looking for technical assistance that helps them with management, finances, marketing, or human resource issues.  Some are looking for niche financing that allows them to augment their product, grow their production, explore new markets and/or employ modern technologies.  Most small business owners also appreciate opportunities to exchange ideas and information with their peers, to learn from the successes and failures of others and to network in the hopes of finding people with whom they can collaborate/partner. 

One great trend in economic development is known as “Economic Gardening”, in which local government becomes an active partner with local firms and helps find ways to stimulate their health and growth. It takes a forward-thinking local government to embrace these philosophies and in the last ten years, many communities have not simply said they would support small businesses, but have followed through by creating programs, and committing resources that benefit their business community. 

The presence of a strong program that supports the growth and development of existing companies is also attractive to businesses that are looking to start or move into a particular community, as it demonstrates that local economic developers will support their growth and development.

All of this adds up to a winning formula.  When you create a sense of support for business growth and an atmosphere of innovation, you can both boost the success rate of small businesses and attract the attention of larger firms seeking a compatible environment.  By offering various forms of assistance such as incubators, accelerators, small business revolving funds, grants, entrepreneurial training and more, forward-thinking communities lead the way in growing vital and healthy economies.

Communities with healthy economies choose vitality over stagnation, resulting in a higher quality of life!