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My crystal ball broke sometime in early 2020. But as we launch into 2021, the remaining shards suggest that we might only be about halfway through this Covid-19 experience.
Yes, the vaccine is out. We’ve witnessed historically rapid development and deployment. Nevertheless, forecasts from firms like McKinsey & Company suggest that we are unlikely to see economic “normalization” until Q3 of 2021.
President Biden has famously stated that our darkest days are ahead of us.
We may have as much rough road in front of us as we have behind us. That is a big deal. Especially for small businesses.
There is a reoccurring hope that the federal fairy godmother will make this all go away. But so far, this has proven to be untrue. And, in actuality, local governments are closer to local businesses and can have a greater impact.
There have been three categories of local government responses:
1. Hunker down and hope to survive. Their efforts focus on short-term survival.
2. A laissez-faire approach and hope to survive. Each business is free to find its own way.
3. Active support for long-term small business survival with an eye toward future growth
This last approach has been the least trumpeted in the news. But some local governments have developed ingenious interventions for small businesses, some of which go beyond just helping businesses survive. They are actually positioning businesses in their communities for a stronger market position even in a post-Covid-19 world.
Nine Ways Local Governments Are Helping — Besides Just Giving Money
Joseph Parilla, a fellow with the Brookings Institute, is referring to these kinds of local government actions when he says, “They realize that it’s much easier to retain businesses and jobs than to let them fail and presume the economy will stitch itself back together. … What we learned from the great recession is that it is not easy for the economy to heal itself.”
Local governments that prioritize supporting small businesses and moving CARES Act and other funds toward them are doing some of the most good. This involves a little “enlightened self-interest.”
Promote Business-Valuing Priorities
1. Get federal aid money out. OK, this is about giving money — but it’s about actually getting it out there. Tim Dillon, Executive Director of the Kenai Peninsula Development Corporation in Alaska, told me that communities that have prioritized getting federal assistance to local businesses — as opposed to sitting on it or repurposing it for government expenses — are seeing better results.
2. Encourage “Shop local.” Akron, Ohio, is actively encouraging shopping online with local businesses by building the Akronite app. Akronite connects shoppers to local businesses and offers points that lead to discounts.
3. Help local businesses shift to online sales. For example, some local governments are supporting their businesses to convert to an online presence through tech grants on Alaska’s Kenai Peninsula.
Invest In Business Development
Some governments are actively utilizing the Covid-19 disruption to invest in shaping the future workforce and the opportunities for small businesses. For example:
4. Invest in workforce training programs aimed toward future economic activity. Charlotte, North Carolina, has invested in a workforce training and placement program that targets fields the city would like to grow in — specifically, advanced tech and renewable energy.
5. Make consulting/good advice available. Local small business development centers are often hubs for business resources and free consultation. Communities such as San Antonio, Texas; Milwaukee, Wisconsin; and St. Mary, Georgia, offer many success stories of growth.
6. Encourage businesses and startups to create online solutions to global needs. Abu Dhabi, as an example, is actively investing in online businesses that can provide global medical and educational solutions.
Focus Government Operations
Sometimes the government itself can just work in a way that makes it friendlier to local business. For example:
7. Streamline internal operations. Governments can improve internal operations, especially through automation. This can allow easier and more timely access to services by the public while cutting the cost of government.
8. Create centralized, user-friendly websites for businesses. Birmingham, Alabama; Oakland, California; and Boston, Massachusetts, are all examples of cities that have created websites to give businesses better access to information, as well as resources on transitioning to an online/delivery-based economy.
9. Make it easier for small businesses to contract with the government. Local governments contract for all kinds of services. They can make it easier for local businesses to discover these opportunities and contract with their local governments.
Governments Can Be Creative
Last March, few people expected that we’d be where we are today. Too many governments have responded with very short-term solutions. They may contribute to public health, but they are damaging people’s livelihoods and the economy — without which public health is difficult to sustain.
Most of these ideas, or solutions similar to them, are not Covid-19-specific. They are really just good ideas, using the energy around the pandemic to generate something new.
Instead of merely asking your local businesses for sacrifice, are there ways your local government could bring light to darker days? What simple innovations could your government enact that both address today’s needs as well as tomorrow’s success?