In the wake of the 2008 financial crisis, the idea of stimulating entrepreneurship in order to expand economic opportunity has become increasingly popular. Although these conversations tend to focus on companies that aspire to become national or global players, we must not overlook the aggregate contributions of microbusinesses—those with fewer than five employees. Representatives from fifteen microbusiness support organizations gathered at Emory University in early 2017 to explore these contributions and discuss the importance of these small-scale enterprises for communities around the country. Our colloquium included groups such as Access Ventures of Louisville, Ky., Rising Tide Capital from Jersey City, N.J., and Mi Casa Resource Center of Denver, Colo., who worked together to collectively identify ways to improve microbusiness support programs around the country.
Some of the benefits of microbusinesses are already well known. These small enterprises provide, on average, 38 percent of their owners’ household incomes, according to a recent study from the Microenterprise Fund for Innovation, Effectiveness, Learning, and Dissemination (FIELD) at the Aspen Institute. Though the dollar amounts may be small, these additional incomes provide pathways by which families can exit poverty. Microbusinesses also create jobs that foster skill development, and often employ local residents who are disadvantaged or excluded from traditional labor markets, the same FIELD study showed. The majority of these jobs offer wages at or above the federal minimum wage, while providing employees with valuable skills and job stability.
This piece originally appeared in the Stanford Social Innovation Review. To read the full article, visit ssir.org/articles/entry/the_macro_benefits_of_microbusinesses.
“Rather than focusing exclusively on one or two companies that might hire 1,000 people each, we must also find ways to support 1,000 companies that might each hire just one or two people.” @EmoryGoizueta