Local leaders have key role in supporting local business growth
Today millions of Americans are still unable to experience the full benefits of the internet due to their lack of access to broadband technology. This year Congress committed over $65 billion under the Infrastructure Investment and Jobs Act to bring broadband into more communities all over America. This initiative is expected to be economically empowering, unleashing local entrepreneurial potential, particularly in the areas of online businesses and electronic payment services.
In its report “Best Performing Cities and Microbusiness Activity” that includes GoDaddy’s Microbusiness Activity Index (MAI), the Milken Institute focuses on understanding the release of entrepreneurial potential in local communities and how to support business growth. The report seeks to gauge the impact that microbusinesses have on local communities and how that activity could be captured in the Best-Performing Cities 2022 (BPC) index.
In addition, the report identifies the role of local leaders in helping entrepreneurs succeed and the key areas of support needed to nurture these emerging small businesses such as access to capital and timely training.
“Broadband infrastructure can lead to economic opportunities, including diversifying economies and addressing skill gaps by modernizing the workforce,” said Charlotte Kesteven, Senior Policy Analyst at the Center for Regional Economics at the Milken Institute and co-author of the report. “The findings can help policymakers and local leaders better understand economic trends and better design programs with the circumstances of their unique economies in mind.”
The Report classifies cities in four ways. Cities such as Lubbock, Texas and Lincoln, Nebraska and others are identified as “High Rank and Rising”, while others are in quartiles of “High Rank and Falling,” “Low Rank and Rising,” and “Low Rank and Falling.”
The two high rank quartiles are notable as follows:
“High Rank and Rising”: This quartile shared high rankings in four key categories: one-year and five-year jobs growth, one-year wage growth, and broadband access.
• On the GoDaddy’s MAI, these cities scored higher than the national average in participation and infrastructure, but lower in engagement, and
• The digital infrastructure to support high-tech industry was in place, but this opportunity had not been capitalized upon—an area for improvement.
High Rank and Falling”: This other top quartile with cities such as Atlanta–Sandy Springs–Roswell, Georgia was high in Milken’s BPC, but experienced drops in their rankings.
• Cities showed a higher need for help for their business online than businesses in other city segments, and
• Cities scored higher than the national average in participation and infrastructure. but lower in engagement—again an area for improvement.
The “Low Rank and Rising” quartile with cities such as Detroit-Dearborn-Livonia, MI were seen as moving up because local leaders pursued policies to modernize their economy in the areas of physical infrastructure and workforce development—foundational for success with a path toward a higher rank.
“Low Rank and Falling” cities such as Pittsburgh, Pennsylvania and others still face core challenges because policies are lacking in key areas. For example, those in this low quartile are twice as likely to identify licensing/permit processes as a hurdle to starting up. One in five expressed this, while in comparison to only one in ten businesses everywhere else.
The report highlights the important role local and state governments have in their cities’ economic improvement. Poor policies and excessive red tape contribute to lower rankings—with much work needing to be done.
Two hundred large and small cities were ranked and placed into tiers, as previously described. The top 10 large and 10 small cities, regardless of tiers, deemed “Best Performers for 2022” are:
Top 10 of the 200 Ranked Large Cities:
- Provo, Utah
- Austin, Texas
- Salt Lake City, Utah
- Phoenix, Arizona
- Palm Bay: Melbourne-Titusville, Flordia
- Seattle, Washington
- San Jose, California
- Fayetteville, North Carolina
- Colorado Springs, Colorado
- Dallas, Texas
Top 10 of 201 Ranked Small Cities:
- Logan, Utah
- St. George, Utah
- Coeur d’Alene, Idaho
- Redding, California
- Idaho Falls, Idaho
- Walla Walla, Washington
- Sioux Falls, South Dakota
- Gainesville, Georgia
- Champaign, Illinois
- Bend, Oregon tied with Abilene. Texas
Overall, this is a very comprehensive report that presents the important factors impacting large and small city economies. The report is timely in that it is pursuing more information and data about the impact of expanding broadband due to recent legislation. It is setting the stage for tracking the release of entrepreneurial potential in local communities, capturing microbusiness activity to better understand the factors impacting local business growth.
