Economic development professionals and the governments they represent could learn a thing or two from international micro-lending programs. Let's face it, most business subsidies and forms of assistance target large projects and established businesses. Impact can be made at a far smaller level.
Forgivable loans for job creation, TIF districts for tax base generation, energy efficiency loans for retro-fitting, and so on are great tools, however, they are missing a key demographic if attempting to develop a local economy. Start-ups, businesses employing less than 5 people, and especially the ever expanding group of businesses that grow on the back of technology, not bricks and mortar.
We cannot continue to underestimate and undervalue the true "little guys" of the business world. Our cost to make an impact on these businesses is negligible in comparison to million dollar abatement agreements. Pennies on the dollar with potential for 100 fold more return.
Imagine what you could have done with that last $200,000 forgivable loan you gave to a manufacturer. You could have given 20 local start ups $10,000 a piece at a below market interest rate. Those businesses could afford to bring an app to market, update to more efficient lawn service equipment, lease a small commercial kitchen to make a catering dream a reality, finance the design software or studio space for a growing photography business, the possibilities are endless. We tend to not pay attention to ideas appearing to be more a dream and less a business. That's a mistake.
We need to remember that our economy has changed. The way we help the economy needs to change as well. Our tools are outdated. Our methods and implementation are antiquated.
There is no denying it anymore. Our country's most successful and recognizable brands started in garages, dorm rooms, and vans parked on the beach. It's time for economic development professionals to not only acknowledge, but to embrace this new fluid, fast paced, passion, technology, and socially powered economy.
We need to catch up.