How Governments are Using Digital Services to Encourage Small Businesses

Posted by govpilot on December 31, 2015

It’s not a surprise that when local governments invest in infrastructure – roads, utilities, and services – it increases the potential for economic development. What’s less well-documented is how local government investment in e-government infrastructure and services impact economic development.

In a paper for the Small Business Administration, Major L. Clark, III and Radwan N. Saade argue that the small business community is an engine of economic growth and job creation. In it they write, “If the United States is to continue to grow and expand, and if innovation is at the heart of this new horizon, then small businesses that are more innovative, in a head to head competition with large businesses, must be given the mantle to lead our nation to its next level of prosperity.”

E-government services can help reduce the amount of friction it takes to start a business and provide existing businesses with more tools to thrive. By focusing on e-government service and infrastructure improvements, local governments can stimulate economic development.

Smarter business decisions with better data

The research phase of starting a small business is one of the most important steps. To be successful, businesses need to be smart about choosing a location, establishing whether or not there’s a market, and estimating business costs. Miscalculating any of these can result in a disastrous starting place for a new business.

The City of Las Cruces, New Mexico is looking to attract new companies to the city and promote the growth of existing businesses with a free online tool designed to help them make smarter decisions through data analysis. The tool is called SizeUp for Local Business Intelligence, and it provides businesses data on revenues, salaries, health insurance costs, supplier locations, and other cost-of-business data to help them make a decision. In partnering with SizeUp and suppling data specific to Las Cruces, the City hopes to give equal access to data to businesses, regardless of their size.

It’s just one tool in the City’s “Economic Gardening” program, which includes resources like traffic flow maps, property records, and overviews of demographics and the City’s labor force.

Removing bureaucratic roadblocks to starting businesses

When just starting out, many new small businesses struggle with issues of compliance, licensing, and taxes. Existing government websites are often confusing and hard to follow, and business owners find themselves in a cumbersome process in order to get their business off the ground.

New Jersey is making the process of starting a business easier with their enhanced online and mobile-friendly Business Formation Services feature. Features like real-time access to filed documents make it easier for a business to establish its presence quickly, removing one of the initial roadblocks that many businesses face. Providing digital services like these make it easier than ever for small businesses to start up – and to start contributing to the economic health of cities.

Leveling the playing field with better infrastructure

Making smarter business decisions and more easily navigating licensing processes helps businesses get off the ground, but business owners also need modern-day tools like high-speed Internet access in order to thrive. Low income neighborhoods in particular – which could see the biggest benefits in economic growth – are often lacking in high-tech infrastructure improvements that would give their businesses a competitive edge.

With the rise of social media, many local businesses are finding that having an online presence is crucial to their marketing. Jennifer Novak, co-owner of Cider Belly Donuts in downtown Albany, New York told Digital Communities that every time she posts to social media she see sales go up 10 to 25% that day. That’s why Albany mayor Kathy Sheehan is planning to expand broadband Internet access throughout the city – particularly in lower income neighborhoods that could use the economic boost.

In Chicago, the City is using sensor and video monitoring to equalize services for both businesses and residents. Where poorer neighborhoods have at times been more reluctant to call and report broken streetlights or leaking fire hydrants, using sensors to track city infrastructure systems can catch problems without having to rely on the community to report it. This is helped to level the playing field in Chicago, ensuring the businesses in all neighborhoods have the same access.

Connected cities mean more thriving businesses

When potential and existing business owners have the proper tools they need to start and grow their businesses, they become powerful tools to help grow municipal economies. Beyond increased tax revenue and new job creation, small business owners are often also connected into the community in ways that spur community development and safety.

If you’d like to see how GovPilot can help you move services and processes into digital, get in touch with us today to schedule a demo.