|Report emphasizes importance of small businesses |
|Posted: Wednesday, December 12, 2012 12:00 pm |
|By KEVIN BOWDEN |
Special to the Press
Carol Reed’s Martin office is cluttered with an extensive collection of business files, reports and economic development data. Her flatscreen computer is filled with information about northwest Tennessee’s business community.
Reed has been working for the past four months as the executive director of the new Entrepreneur Center of Northwest Tennessee.
It is a job she has a sincere passion for and she is already making a difference, working with nine potential business startups from Obion, Weakley and Gibson counties.
Reed’s work has taken on a whole new level of importance in light of a recent report from the Delta Regional Authority emphasizing the importance of small businesses on the region’s economy.
The report is particularly timely considering the state of the economy in northwest Tennessee and the sluggish economic recovery from the 2007-09 recession.
Reed has been busy since early August promoting the entrepreneur center and establishing a network of contacts in the business community. It is her goal to create a receptive environment for small businesses to prosper.
Gov. Bill Haslam has characterized business startups as “a critical generator of new jobs in Tennessee.”
Reed said it is critically important to educate the region’s youth about the importance of entrepreneurship and she said instilling a “shop at home” mentality is a second key to economic growth.
“We want to start with high school students, telling them it’s okay to be an entrepreneur,” she said. “We want to instill a level of confidence in our young people.”
Developing community support for entrepreneurs and small businesses is one of the key goals of the Entrepreneur Center of Northwest Tennessee.
Reed said the center is already working on an angel capital fund that will help get new businesses get off the ground.
“We also want to reach out to the agricultural sector of the economy. That’s our largest industry in northwest Tennessee,” Reed said.
The entrepreneur center in Martin is one of nine such centers in the state.
“We are the most rural entrepreneur center in the state,” Reed said.
She and others involved in the program are working to promote small businesses in the region and help potential new small businesses with such issues as funding, developing a business plan, marketing and branding.
The success of the entrepreneur center will have a direct impact on the region’s economy — through small business growth. The statistics in the DRA report underscore that small businesses represent the future when it comes to job growth.
The DRA report examines the circumstances that created and eliminated jobs over the past 18 years in the eight states and 252 counties that make up the Delta region.
“The findings in this report clearly suggest that the Delta region has become increasingly dependent upon locally-owned, small businesses to provide jobs,” the report states. “The findings also illustrate that the region did not recover, in terms of job creation, from the recession in 2001 in the same way it recovered from the 1990-91 recession. The establishment dynamics data utilized in the study suggest that the region has developed an entrepreneurship problem.”
Among the conclusions of the report is the fact that the Delta region is becoming a region of increasingly local, smaller firms.
“Establishments with nine or fewer employees provided nearly 42 percent of all jobs at the beginning of 2010. Since 1992, locally-owned establishments with nine or fewer employees have created over 91 percent of net new jobs,” the DRA report states.
The entire DRA report covers 32 pages and extensively analyzes trends in job creation and job losses across the Mid-South. The 252 counties and parishes served by the Delta Regional Authority are primarily rural in nature. The DRA covers 21 counties in West Tennessee, including Obion County.
The DRA report, entitled Jobs and Small Business, was prepared by Dr. James L. Stapleton, executive director of the Douglas C. Greene Center for Innovation and Entrepreneurship at Southeast Missouri State University. He studied economic development trends across the region from 1992 to 2009, a period which included two national recessions (2000-01 and 2007-09).
“One must go back to 1945 to find a time when so many jobs had been eliminated so rapidly in the United States,” the report states. “Compared to all prior recessions since the end of World War II, the 2007-09 recession ranks worst in terms of the number of jobs lost (over eight million), and second-worst in the percentage decline (6 percent).”
The jobs report utilizes graphs and pie charts to illustrate trends in job growth and job declines.
“During the 18-year period, 321,065 establishments expanded in the Delta region. The expansion of these firms created a total of 2,622,684 additional jobs. There were 258,166 firms that contracted during the period. These contractions resulted in the elimination of 1,943,396 jobs. On the surface the net increase of 679,288 appears rather positive,” the report states.
One of the key observations identified in the report is the conclusion that widely supported business attraction strategies and investments have produced very few additional jobs in the Delta region.
Tennessee Gov. Bill Haslam is one of the members of the Delta Regional Authority and it was his predecessor, Phil Bredesen, who submitted a 37-page Tennessee Delta Development Plan in January 2009. In that plan, Tennessee’s evolving economy is examined and strategies and goals are laid out for economic development.
“Like the nation, Tennessee has evolved from an agricultural and extractive based economy to an economy based on manufacturing. It is now transitioning into an economy based on the service sector,” Bredesen’s plan states.
“As manufacturing continues to be the dominant sector of the Tennessee economy, the service sector is the most rapidly growing,” the plan states. “Today, service-providing jobs comprise more than 80 percent of Tennessee’s economy.”
The state plan dissects Tennessee’s infrastructure and identifies strengths and weaknesses within the state.
“The creation of ‘home-grown’ industries, or entrepreneurships, is a necessary approach to developing employment opportunities in the Tennessee Delta,” the plan states.
“Many of these new companies are ‘high-tech’ firms, while others produce more traditional products for national and international markets,” the plan states. “Perhaps one of the best examples is FedEx which was a start-up in Memphis which has grown into an international corporation.”
Published in The WCP 12.11.12