The Value of Small Business - PowerPoint PPT Presentation

Loading...

PPT – The Value of Small Business PowerPoint presentation | free to view - id: 70dc9b-ZWNlN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

The Value of Small Business

Description:

The Value of Small Business Promoting Economic Development through Incubation and Innovation – PowerPoint PPT presentation

Number of Views:89
Avg rating:3.0/5.0
Slides: 30
Provided by: LisaM178
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: The Value of Small Business


1
The Value of Small Business
  • Promoting Economic Development through Incubation
    and Innovation

2
Michigan State UniversityProgram in Public
Policy and Administration
  • Authors
  • Monica Dorhoi, Greg Grootendorst,
  • Chelsea Haring, Kelly Klumpp, Lisa Makar, Reiko
    Niwa, Carmen Pricopi
  • Professors
  • Roger Hamlin and Richard Hula

3
Background
  • How does a state like Michigan stabilize
    inner-city economics, redirect development back
    to the central city, and improve the lives of
    inner-city residents?

Small Business Development Incubation
4
Benefits of Small Businesses
  • Employment Statistics
  • Small Businesses
  • represent 99.7 percent of all employers
  • employ 53 percent of the private work force
  • provide approximately 75 percent of the net new
  • jobs added to the economy
  • account for 38 percent of jobs in high
    technology sectors
  • provide 67 percent of workers with their first
    jobs
  • and initial on the job training in basic skills
  • hire a larger proportion of employees who are
  • younger workers, older workers, women or
    workers
  • who prefer to work part-time
  • The U.S. Small Business Administration

5
Benefits of Small Businesses
  • Innovation Economic Statistics
  • Small Businesses
  • provide 55 percent of innovations
  • produce 39 of the gross national product
  • provide 47 percent of all sales in the country
  • account for 35 percent of federal contract
    dollars
  • account for 51 percent of private sector output
  • represent 96 percent of all U.S. exporters
  • The U.S. Small Business Administration

6
Problems
  • Big industrial corporations seem to prefer large
    expanses of land for new factory development,
    something difficult to find in aging urban
    communities
  • Even when downtown office building construction
    occurs, those offices do not often provide
    employment at the skill-level needed by central
    city residents
  • 62 percent of entrepreneurs fail in the first 3
    to 6 years
  • Rarely do entrepreneurs, prior to starting their
    first venture, already possess all the skills
    they need to become successful

7
Purpose
  • The purpose of this report is to investigate the
    innovative state programs, and determine if they
    are applicable to Michigan.
  • Our objective is to make recommendations to the
    state legislature promoting small business in the
    state.
  • We believe that inner-city development is key to
    improvement of the entire urban region, and small
    business development is crucial to inner-city
    revitalization, innovation and economic
    diversification.

8
Business Incubation
  • Programs that assist in the formation,
    development
  • and survival of new enterprises.
  • Lichtenstein and Lyons, 1995
  • Old Concept Incubator-with-walls
  • New Concept Incubator-without-walls
  • Incubator with an affiliates program

9
Incubator-with-walls
  • Provides
  • subsidized rent
  • office space
  • minimal services

10
Reasons for High Rate of Small Business Failure
  • Poor management
  • Poor marketing savy
  • Undercapitalization
  • High overhead costs

11
Incubator-without-walls
  • New Concept

Training
Networking
Building space
Research
Targeting
Incubator without walls
Regulations
Marketing
Financial Capital
Taxation
12
Policies Targeted at Women and Minorities
  • Issue Assist underrepresented groups in
    establishing
  • businesses of their own
  • Encourage development in inner cities
  • Facilitate minority economic development
  • 1999 Self-employment Statistics
  • 4.6 million Women (39 percent of the total)
  • 0.6 million Asians (4.7 percent of the
    total)
  • 0.8 million Blacks (6.8 percent of the
    total
  • 0.8 million Hispanics (7.1 percent of the
    total)
  • Innovative State Programs Procurement Programs,
  • Minority Subcontractors Tax Credit,
    International
  • Franchise Association Program,
    Minority Business
  • Development Division

13
Training and
Development Policies
  • Issue Education of workforce is essential to a
    states economic growth
  • Problem Inadequate training high costs of
    training programs lack of customized training
  • Trends Small Business Development Center, JTPA,
    JOBS
  • Innovative State Programs
  • EnterpriseOhio Network
  • Pennsylvania Guaranteed Free Training Program
  • Wisconsin Business Development Center
  • California WorkNet
  • Michigan Programs
  • Economic Development Job Training Program
  • Consultation Education and Training Division

14
Networking
Opportunities
  • NetworkAn interwoven set of relationships that
    allow members to communicate information
    concerning a common interest.
  • Types Investor ? Business Networks
  • Government ? Business Networks
  • Technology Based Networks
  • Incubator Networks
  • Support Networks
  • Innovative State Networks
  • Oregon Network, alaskaNET
  • The Delaware Small Business Development Network
  • Montanas Small Business Innovation Research
    and
  • Technology Transfer Program
  • Eastern Maine Development Corporation
  • Michigan Networks
  • Michigan Life Sciences Corridor

15
Building Space
Incubators Public Private Partnerships Effectiv
e Utilization of Current Resources
Vacant Land Empty
Buildings Under-employed
facilities State Policies buildings, space,
sent, common services States that have been
integral in the construction, development, and
support of various incubators Ohio, Maryland,
Virginia, New York, Massachusetts, Montana
16
Raising Financial Capital
  • Issue Difficulty in getting the startup money
  • No assets ? no loan ? no investment ? no
    assets
  • Protection is also needed for lenders
  • General Programs
  • Capital Access Programs enhance
    small businesss
  • access to capital
  • Loan Guaranty Programs guarantee loans/
    credit lines to small business entrepreneurs/
    owners
  • Innovative Programs
  • Certified Capital Company (CAPCO),Wisconsin
  • Export Financing Assistance Program, Virginia
  • HUBZone E. C. Program, Tennessee
  • Michigan Programs Business and Industrial
    Development Corporations, Microenterprise
    Program, Capital Access Program, Tax Increment
    Finance Authorities, Downtown Development
    Authorities

17
Small Business Taxation
  • Issue High percentage of small businesses fail
    during
  • 3 to 6 years
  • Need policy that can help small businesses
  • survive in the long-run
  • General Programs Enterprise Zone Programs
  • Innovative Programs
  • Keystone Opportunity Zone, Pennsylvania
  • Keystone Opportunity Expansion Zone,
    Pennsylvania
  • Michigan Programs Renaissance Zone Program,
    Local Development Financing Act, Industrial
    Property Tax Abatements, Brownfield Legislation,
    Michigan Economic Growth Authority

18
Environmental Other
Regulations
  • Issue Businesses must make investments to
    comply
  • with environmental regulation
  • Small Business Regulatory
    Enforcement Act
  • of 1996
  • Problem Small businesses bear a disproportionate
    share of
  • regulatory costs and burdens
  • Trends SBAs ombudsman
  • Innovative State Programs Illinois Small
    Business
  • Environmental Assistance Program ,
    Ohio Small
  • Business Assistance Office, Rhode
    Island Economic
  • Development Corp. Regulatory
    Permitting
  • Assistance, Voluntary Assistance
    Program
  • Michigan Programs Michigan Clean Air Ombudsman,
  • Michigan Green Power Aggregation
    Program, Energy
  • Star Promotion Program

19
Marketing
  • Issue Assist small businesses in marketing
    their
  • products and services in U.S.A and
    overseas
  • Evaluate companies and products for
    international
  • market entry
  • Assist small businesses in their marketing
    research
  • Problem Marketing research is expensive and
    requires
  • access to rich data bases
  • Innovative State Programs The Connecticut
    Procurement Technical Assistance Program,
    Agricultural Export Promotion Program in
    California, Florida Procurement Technical
    Assistance Centers, Office of Small Business
    Assistance in Texas

20
Research
  • Issue Small firms produce 8 times the number
    of
  • successful new products per million
    dollars
  • developed by large firms
  • Small firms produce 2 ½ times as many
  • innovations per employee as large
    firms
  • The cost of RD of small firms is about half
  • that of large firms
  • Problem Access to technology
  • manufacturability and marketability of
    new
  • products
  • Innovative State Programs Research and
    Development Tax Credit (California), Product
    development, RD Ben Franklin Technology Partners
    (Pennsylvania)
  • Michigan Program Michigan Life Sciences Corridor

21
Policy Recommendations
  • Goal To emphasize the value of small businesses
    by encouraging three aspects of the incubation
    process.
  • Information and Education
  • Networking
  • Evaluation and Tracking

22
Information Education
  • Provide Affordable Labor Management Training
    Programs
  • Make all programs accessible to all Michigan
    businesses
  • Utilize college and university resources
  • Use training programs to attract businesses,
    advertising an educated work force

23
Information and Education
  • Advertise and Promote Small Business Development
    Programs to Entrepreneurs
  • Develop an agency within the MEDC with the sole
    purpose of gathering and disseminating
    information on federal, state, and local programs
  • Ensure the efficient use of business
    development resources
  • Utilize agency as a one stop shop for small
    businesses seeking any type of assistance

24
Networking
  • Develop a State-wide Network of Programs that
    Promote and Assist With Small Business
    Development
  • Encourage development agencies to interact
  • Expose duplicate service providers
  • Use the MLSC as an umbrella organization,
    allowing all of Michigan to become part of the
    corridor

25
Networking
  • Initiate Investor-Business Networks that
    Encourage Investment within Michigan
  • Link potential investors with Michigan companies
  • Provide incentives for Michigan residents to
    utilize the network

26
Networking
  • Require MLSC Incubators to Develop
    Inner-Incubator Networks
  • Allow participants to build on the success of
    fellow participants
  • Form lasting business relationships
  • Encourage emerging businesses to remain within
    Michigan

27
Evaluation Tracking
  • Monitor the Success of State-Funded Programs
    While Mandating Economic Development Service
    Programs to Track Participant Demographics
  • Determine segments of the population which have
    not utilized development resources
  • Target the needs of under-represented groups
  • Allow public access to program evaluations,
    providing both qualitative and quantitative
    information

28
Small Businesses Must Be a Priority in Michigan!
29
The End
About PowerShow.com