Monday, February 14, 2011

CityWatchLA - Times of Crisis: Think Small

CityWatch, Feb 15, 2011
Vol 9 Issue 13


As the Active ImageCity of LA wallows in the midst of a staggering budget shortfall, it appears that one of the simplest strategies for jumpstarting LA’s local economy would be to retool the current “bigger is better” approach to business development in favor of a model that supports small businesses.

According to the latest jobs report, only 36,000 new jobs were added to the national economy in the month of January. At the same time, figures from Intuit Payroll’s monthly Small Business Employment Index show that payroll clients with fewer than 20 employees added 70,000 new jobs during the same month. The City of LA invests valuable time and resources courting large corporations but the results fail to justify the effort. Meanwhile, small businesses are demonstrating an agility and adaptability that allows them to leverage small investments into huge payoffs in jobs created, services provided, and overall economic impact.

Nationwide, small businesses have added more than 1 million jobs since October 2009 but in Los Angeles, where fully two-thirds of the local economy is made up of small businesses, entrepreneurs capable of bidding on local contracts clearly communicate the need for municipal assistance to jump start the process. During Mayor Villaraigosa’s January Neighborhood Council “check-ins,” residents commented on the need for a City services clearinghouse for small businesses.

Los Angeles is in position to capitalize on the Obama Administration’s new “Small Business Jobs Act” as an opportunity to bolster job growth in the small business sector. But to compete for federal small business grants LA will need to develop an effective framework to aid Small Business Development Centers that can implement federal funds quickly and efficiently.

Los Angeles is in position to partner with the local small business network in the delivery of core services, ensuring that project deliveries stay on track and that the city remains in compliance with federal guidelines. But fully 60% of the small businesses in position to deliver services and product indicate that they don’t have access to the capital necessary to bid on the contracts.

Small businesses are hiring at a faster rate than city government and big corporations and LA must support the economic drivers by looking for the small businesses within each industry and look for opportunities to bolster their position.

Supporting LA’s small businesses will yield results in these four ways:

  • It will improve upon LA’s implementation shortfalls of the federal stimulus funds and Measure R revenues;
  • It will optimize LA’s ability to qualify for federal small business grants;
  • It will provide local community organizations an opportunity to qualify for grants and partner with local businesses to provide the services that are no longer offered by the city;
  • It will increase the number of new hires within the small business sector, putting Angelenos to work and strengthening our economy.

LA’s small businesses drive our economy and it’s time that the City of LA treat them like giants, made up of the most innovative and creative people in the world, folks who need our help almost as much as we need theirs.

(Stephen Box is a grassroots advocate and writes for CityWatch. He can be reached at: Disclosure: Box is also a candidate for 4th District Councilman.)

1 comment:

bike hair said...

This is in contrast to how the City and and other public agencies fail in recognizing a key constituency, and it plays in our very urban fabric. Some observations:

1) The City and Metro could begin by transforming current sterilized Metro stations into hubs by permitting vendors and limited commercial activity.

2) The City should initiate a zone to allow for a defined limited commercial uses that could apply by right in medium density residential zones. This self mitigating approach would put the City on sustainable path in both economics and transportation in giving an incentive for neighborhood businesses at the same time as reducing unnecessary auto-trips.