Page 199 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

188 Michael D. Woods and Glenn Muske

(3) offer suggestions on how to encourage and build the community’s mi-
crobusiness segment with examples of successful assistance and innovative
delivery methods.
The goal of this chapter is to help community members, leaders, and de-
cisionmakers recognize the importance of microbusinesses in a local econ-
omy. Many of the most successful economic development efforts come
from developing a diversified economic structure which includes the small,
and seemingly insignificant, microbusiness owner.

MICROBUSINESSES AND ECONOMIC DEVELOPMENT

The Kettering Foundation (2000) suggests that the development of a
healthy community is linked to its diversity in two forms. Authors such as
those in academia (Beaulieu 2002; Emery, Fey, and Flora 2006) and popu-
lar press writers, such as Jack Schultz (2004), author of Boom Town USA, dis-
cuss diversity in the types of capital available in a community. These capi-
tals include human, financial, infrastructure, social networks as well as
economic diversity. A second view of diversity in the literature focuses on
one segment, in this case economic diversity. The idea is that a thriving,
growing economy has a mix of businesses including product and service,
large and small, and new and old (see chapter 5).
Key to this idea of diversity is that economies, whether in a large urban
area or a small isolated rural setting, must build on local resources (Darling
2004). Often communities look for one large manufacturing business or
service firm as a core upon which other businesses are built. In other com-
munities, the core focus involves finding the next gazelle or fast growing
business as the key element for community growth. Often forgotten or ig-
nored is the local resource of entrepreneurs. Most typically those entrepre-
neurs are eager and excited to start what is usually called a microbusiness.
According to the U.S. Department of Labor, new microbusiness start-ups,
from 1992 to 2005, generated more than 67 percent of gross job gains (U.S.
Department of Labor 2005). One estimate is that 18 million people in the
United States take steps each year to start a microbusiness. Those microbusi-
nesses, part of an economic segment called “small business,” form the core of
the U.S. economy. They were the building blocks of the economic boom of
the 1990s and continue to represent that core today. In fact, microbusinesses
have been important in economic development throughout history.

Microbusinesses Defined
There are several ways to define a microbusiness. The most typical ap-
proach follows the U.S. Small Business Administration (SBA) (2006) lead