Small Businesses Play Key Role in Economic Growth
When thinking about the local economy, success is often attributed to the largest players — frequently, these are the resident industry leaders who provide a variety of services and act as job creators en masse.
Equally important, however, are the contributions made by local small businesses. A market full of diverse small businesses plays a critical role in the positive economic growth of a community; when considered collectively, their impact cannot be ignored.
One way that small businesses facilitate economic growth is through the creation of valuable local jobs for skilled workers. Often times, it is easiest to envision large corporations as the primary place of employment for educated professionals and trade workers; however, there are also a considerable number of skilled jobs created and maintained by small businesses.
While a small business may not have a large number of employees relative to the total population, the number of businesses with opportunities for employment is exponentially larger. From a community development perspective, large numbers of small businesses with few skilled positions are often just as valuable as a small number of employers with many different jobs.
The opportunity for diverse employment is significant as well. While one large company may have a small number of specific industry sectors with various support positions, a mixed market of small businesses offer employment opportunities to a wider range of skilled professionals and tradespeople. This also allows a community to maintain a heterogeneous offering of work skills, which helps prevent municipal dependence on a particular economic sector.
Maintaining a diverse body of employment is similar to any other sound investment; a community can mitigate economic risk by spreading its employment base across multiple industries instead of relying on the success of one.
Improving the local quality of life is another important economic function of small businesses. By providing a diverse array of competitive small businesses, a community can encourage its population to “live, work and play” in the same municipality.
In a cityscape such as Rio Rancho, there is a significant opportunity for small businesses to offer goods and services that are only available in other metropolitan areas. Economic travel is most often a necessity, not a choice; residents of a given area are less likely to commute for commercial purposes if the business community is able to meet their demands locally. By encouraging the development of a diverse small business landscape, with options for both basic needs and entertainment demands, we simultaneously stimulate the local economy by retaining income and attracting new residents.
There is no “one size fits all” solution to economic growth — it takes a unique combination of many different factors and players to stimulate and improve a local economy. No matter the locality, however, a diverse landscape of small businesses will always be a critically important element of economic success.
I encourage the citizens of our city to embrace the small business community, both as service providers and job creators. By doing so, we actively facilitate the positive growth of both our economy and our community as a whole.
(You can also view this blog in the Rio Rancho Observer)