The way to get Alabama back to work is to think small.
That was the message Tuesday at a summit focused on the vast number of enterprises with five or fewer employees. These “microbusinesses” make up about 88 percent of all businesses in the state, said one of the event’s organizers.
“If you’re an attorney and you have a paralegal and a receptionist, that’s a microbusiness,” said Gaynell Jackson, president of the Alabama MicroEnterprise Network. “If there’s a grocery store that has two clerks, that’s a microbusiness. You see them every day.
“That’s the group that’s going to change the economic structure.”
With freelancers and entrepreneurship on the rise, microbusiness numbers have swelled. Experts predict it will keep rising. The Freelancers Union estimates that about one-third of all workers are freelancers right now, and that half of all workers will be freelancers within the next five years.
About 20 percent of millennials own their own businesses and that generation will make up 75 percent of the workforce by 2020, according to Gen Y research group Millennial Branding.
“I think it’s a key piece of where the economy’s going and where the labor market’s going,” said Joyce Klein, the director of an Aspen Institute group that tries to build a better support network for microbusinesses.
Klein said more of that kind of support is needed from lawmakers and community leaders in Alabama, which has about 165,000 microbusinesses.
“If you’re an economic development arm of the city, you might say, ‘We’re going after this business because they have 25 employees and they bring in a half-million dollars in revenue.’” Jackson said. “Well, you could go after five businesses that have five employees and have $100,000 in revenue. And now you’ve given five businesses the ability make money and help their community as opposed to just one.
“A lot of it is just changing the mindset. The same dynamic works.”
How much could that focus shift help? A study by the Association for Enterprise Opportunity found that if one out of every three of the nation’s microbusinesses added just a single worker, there would be no more unemployment.
AEO Board Chair Patricia Harris was one of the speakers Tuesday at the microbusiness summit in downtown Montgomery.
“You have such a wonderful engine already here in Alabama,” Harris said. “All it needs is to be continuously fed.
“Talk to your legislators. Talk to the banking partners.”
October 28, 2014