Can Your City Build a Better Local Business Network?

What innovations could help you nurture home-grown business and minority-owned companies? City Accelerator can help you find out.

The recent competition to lure Amazon’s new headquarters shows how cities can quickly pull together cross-functional and cross-sector teams of senior leaders to attract thousands of jobs. We saw firsthand how the business community, economic and workforce development, city planning and zoning, transportation departments and other agencies can work together to design policies and incentives to attract big business.

But what if cities were to flip that approach on its head, and consider also redirecting their resources and repackaging their incentives to promote a web of support services for local businesses interested in growing in place? Could the results be even more sustainable and impactful?

That is the question we will pose to the next group of City Accelerator cities.

The City Accelerator is an initiative led by Living Cities and Governing
, and supported by the Citi Foundation, that helps cities speed up the adoption of innovations that can improve the lives of their residents, especially those with low incomes. The Local Business and Job Growth City Accelerator will explore with participating cities how they can redeploy the levers they control for economic development to nurture the expansion of home-grown businesses, especially those owned by people of color, in a way that will drive employment and benefit the entire community.

In today’s economy, large and mature businesses are not producing enough jobs to meet the growing demand. Sustainable, inclusive economic growth depends less on attracting one or two large flagship employers, and more on creating a fertile environment for business dynamism. Research shows that 90 percent of net new jobs are created by companies less than five years old, and businesses with fewer than 20 employees account for nearly 97 percent of net new job creation. Despite the vital importance of the small business sector to a thriving economic base, significant barriers exist that prevent small businesses from setting up shop or growing.

Work to improve conditions for small businesses is already underway in many cities, through departments of small business and economic development agencies across the country. Cities including Boston, Detroit, New York, and Washington, D.C., have developed comprehensive strategies around supporting early-stage businesses as the key to growing the local economy, creating more jobs for residents and reducing seemingly-intractable racial wealth disparities. In 2008, more businesses in the U.S. closed than opened for the first time in three decades, and even as business starts have begun to recover, the average annual increase in small businesses between 2012 and 2014 was just 25 percent of historical norms. Entrepreneurs face significant hurdles in accessing capital, navigating regulations, and connecting to support networks and sources of talent. These hurdles are especially cumbersome to business owners of color, who are often not well served by the existing network of supports.

As conveners, investors, and regulators
, local government is able to create the environment where businesses owned by people of color can become cities’ high-growth employers of tomorrow.

For the next City Accelerator, Living Cities and the Citi Foundation are looking for five cities to participate in a 12-month cohort beginning July 2018 to reimagine their small business support ecosystem. Participating cities will receive financial and strategic support, which will include technical assistance from Rodrick Miller, who has previously helped lead the economic growth strategies for the cities of Detroit, New Orleans, Baton Rouge and Phoenix.

We know this is a particularly complex issue, and will be looking to work with cities that already have already begun the journey. Applicant cities should already have comprehensive small business development plans in place that include specific strategies for supporting firms owned by people of color, often referred to as Minority Business Enterprises (MBEs), with an emphasis on:

  • Identifying high-growth, high-potential industries, segments and businesses;
  • Convening lenders and helping make businesses bankable;
  • Revising technical assistance offerings;
  • Co-developing solutions with industry leaders;
  • Collecting and reporting robust datasets to track performance on business and workforce
  • Equity, disaggregated by industry and down to the specific project; and,
  • Embedding a racial equity lens in city-led supports for local businesses.
Individual city teams for this initiative might include leadership from the mayor’s office, departments of small business services and economic development, licensing and permitting, equity and inclusion, budget, and workforce development. Each team will also include a communications/press role to support effective storytelling of the city’s participation in the cohort.

Be sure to read updates and lessons from this initiative throughout the entire course of the engagement, from city selection to the development of an implementation guide that will help spread this work to cities across the country at, and join the conversation on social media with the hashtag #CityAccelerator.

Zach Patton -- Executive Editor. Zach joined GOVERNING as a staff writer in 2004. He received the 2011 Jesse H. Neal Award for Outstanding Journalism