Local governments that want to strengthen their small business communities generally work through three distinct strategies: easing regulatory burdens, connecting businesses to existing resources, and providing direct support such as shared spaces, relief funds, and local purchasing programs. That framework emerges from case studies and recommendations from economic development organizations including the Urban Institute, the International Economic Development Council, and the National League of Cities, and it offers a structured way to understand the landscape of local support rather than a simple list of programs.
Introduction: The Vital Role of Small Businesses in Local Economies
The stakes for getting this support right are considerable. Firms with fewer than 50 employees employ 44 percent of workers in the United States, according to the Urban Institute, which also describes small businesses as a wealth-building tool for their communities. Research from the Initiative for a Competitive Inner City, published in the International Economic Development Council's Economic Development Journal, found that small businesses rival and often exceed the impact of large businesses in providing jobs for local residents—yet, as Kimberly Zeuli and Kathleen O'Shea noted in that 2017 journal, city leaders and economic developers too often fail to prioritize small businesses in their growth plans.
The National Business Association adds context on why that prioritization matters: communities with a strong base of small businesses tend to recover more quickly from economic downturns, and small business ownership helps close income gaps by empowering entrepreneurs from underrepresented backgrounds. Small businesses also produce 16 times more patents per employee than larger firms, according to the SBA Office of Advocacy, underscoring their role in advancing technology and economic dynamism.
