Two More Reasons to Support Small and Micro Business Infrastructure

We’ve posted a lot over the years about the value and multiplier effects of small businesses to local communities.  Boku Kodama (Renaissance Entrepreneurship Center and CAMEO board member) wrote about two studies in Sonoma and Los Angeles counties in a concept paper he recently presented. The studies give more evidence for the value of your services and the economic benefits.

From Boku:

Regional studies by the Los Angeles Economic Development Corporation and another by the Marin Economic Forum (MEF), revealed that for every single new job created, it had the exponential effect of generating between one to nine other new jobs! The tax base alone could reap revenues beyond anything seen in recent memory. The catalyst for all of this is new small businesses started in the local economy. Why wouldn’t a collaboration of forward-thinking partners do the math, and invest their funds to local business development as if it were IPOs for Microsoft, Apple and Google.

In the study released by MEF – “What is the Value of a Job in Sonoma County?” – 19 industries were examined showing their revenue effects on the local and state coffers. Their tool for conducting the study was based on the compilation of resources and extensive data provided by IMPLAN, short for “Impact Analysis for Planning,” a private firm. IMPLAN is used by government, education and public sector economic analysts to examine data from the Bureau of Labor Statistics, the Census Bureau and regional statistics to find causes and predictions of a region’s economic impact. The following is an example of six industries in Sonoma County showing that when one new hire is created in an industry, it spurs additional jobs, new wages and new sources of revenues for government.


Studies such as MEF’s demonstrate that some of our metrics may no longer be valid because of the rapidly changing landscape of local, national and global economics. This situation is similar to when in 2001 the Oakland A’s General Manager Billy Beane looked at on-base percentage as an indicator of a productive baseball player rather than homeruns or batting average. Told in a book and movie appropriately entitled “Moneyball,” by Michael Lewis, Beane’s innovative techniques changed how baseball’s traditionalists dug themselves out from a decades-old paradigm based on old habits and rituals than actual data. Public officials should look for their own Moneyball to understand the underlying factors that generate strong returns to our new local economies.

As leaders, as a municipality, as a region and a state – we need to consider our economy through new lenses and implement a conscientious policy of supporting entrepreneurship and innovation centers as a beneficial practicality that serves each community’s well-being just as our fire and police departments, public schools, libraries, parks and medical centers.