Is all business local? Authors John A. Quelch and Katherine Jocz made the case that it is in a book published earlier this year. In All Business Is Local: Why Place Matters More Than Ever in a Global, Virtual World Quelch, dean and distinguished professor of international management at the China Europe International Business School (CEIBS) , and Jocz, a Harvard Business School researcher, say that even though technology allows companies to be global, it pays for businesses to think of their customer experiences where they will happen – where their customers live.
Quelch and Jocz frame their argument through the lens of large global brands like Starbucks and McDonald’s. “Even McDonald’s cannot be a great global brand without being a great local brand. It could not penetrate, let alone dominate, markets the world over without expanding beyond its global core products and cultivating authentic local appeal,” the authors write.
All business may be local but it’s not just populated by global brands. In fact, if all business is local, most local business is small. By traditional definition, a small business is a company with fewer than 500 employees. Not long ago, the widely accepted figure was somewhere around 90 percent of all businesses fell into that category.
Some new statistics out put the number of small businesses in the United States in new focus. An eye-opening 98 percent of all companies in the country employ fewer than 500 people and only a fraction of those companies employ more than 100 people. In all, 96 percent of all U.S. companies have fewer than 100 workers.
Overall, just better than 16,000 U.S. businesses fit the description of large companies. In the calculus of attracting investment and jobs, it is the large companies and large projects that are so heavily coveted because they can deliver the most impact in raw terms and from the multipliers they create.
Balancing the need to grow business organically with the value of attracting new investment is a resource issue that economic developers face at every level.
Aaron Demerson, the chief economic development officer for Texas, says the state’s efforts are filtered through a singular focus – creating jobs, whether they come from recruitment or expansion. ”We have positioned ourselves for local expansion and growth opportunities while also aggressively pursuing any available recruitment opportunities. For us, the bottom line is job creation. That’s the most important thing. Not only does each project create direct jobs, it also creates indirect jobs, then property taxes in the local community, then sales taxes,” he said in an interview with an Austin newspaper in June.
But not every place will have the resources or the attributes that make them attractive for major site selections. Some experts, like Dr. Deborah Markey of the RUPRI Center for Rural Entrepreneurship, encourage smaller communities to focus on developing businesses and cultivating innovation in their own backyards. The same tecnological capabilities that allow global brands to be in everyone’s neighborhood allow neighborhood companies to vastly expand their market.
And smart communities of every size know the strategic value that entrepreneurship plays in creating vibrant business communities and how quality of place attributes can be a major advantage in drawing and keeping entrepreneurial talent.
A number of forward-thinking communities have built academic, financial and professional resources aimed at entrepreneurs into their overall economic development efforts with strong results.
In Kentucky, three new state-sponsored initiatives were launched to encourage private lending to small business. The programs open access to nearly $155 million in new loans to help the state’s small businesses with job creation.
In Wichita KS, an area with a rich legacy of entrepeneurism, a suite of resources, including technical assistance and incubator space, support emerging businesses. In Charlotte, collaborative environments such as Ventureprise and Packard Place not only give emerging companies a place to grow but encourage exchangeq of ideas and experiences. In Albuquerque, organizations like WESST (Women’s Economic Self-sufficiency Team) are a key component of the region’s economic development efforts.
How important is small business and entrepreneurship in your community? How does cultivating homegrown business factor into your economic development strategies and what programs or initiatives are part of that effort? Is entrepreneurial activity more important or less important in your community now than it has been in the past? Are Share your insights and experiences.
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