The Enterprise Center at Salem State College in the News

GROWTH OF MICRO-BUSINESSES AND PROPRIETORS OFFERS

HOPE FOR AMERICAN ECONOMY

June 25, 2009, Salem MA -- Research conducted for The Enterprise Center at Salem State College has found that, while wage-and-salary employment has indeed declined, self-employed proprietors and micro-business employment may actually be growing.

Using data from the U.S. Census Bureau (www.census.gov) and the U.S. Bureau of Economic Analysis (www.bea.gov), Dr. Laurence E. Goss authored Proprietor Trends in Massachusetts and Essex County: 2001-2006 available at www.enterprisectr.org His findings led him to look more closely at national trends, where he found that

Proprietor employment grew seven times faster than wage-and-salary employment nationwide between 2001 and 2006. The latter rose just 4.3 percent nationwide, but non-farm proprietor employment rose 30.9 percent.

The number of American businesses increased 14.2 percent between 2002 and 2006, even though wage-and-salary employment grew just 5.6 percent. The increase was fueled by sole proprietors and micro-businesses, which grew 17.7 percent and 15.6 percent, respectively.

In fact, there were 34,496,600 proprietors in the US in 2006 including 20,768,555 sole proprietors and 13,728,045 proprietors with wage and salary employees

In fact, there were 34,496,600 proprietors in the US in 2006 including 20,768,555 sole proprietors and 13,728,045 proprietors with wage and salary employees

In Massachusetts, as in the U.S., roughly one in five workers is self-employed.

When asked if the recession that has occurred since 2006, the most recent period for which most data were available in Massachusetts, invalidates the findings, Dr. Goss replied, “Recessions traditionally produce an increase in proprietors as laid-off workers opt for self-employment. What it points out is the need for better access to more current data.”

Why are these findings important? Because they signal a dramatic change in change in how America works, suggests Christine Sullivan, Executive Director of the Enterprise Center. “You can run a global business with a desk and a laptop today. That couldn’t have happened 20 years ago,” she says. “More people are opting for self-employment, especially in this economy, and more people will be self employed at some time in their career.”

The findings are also important because these one- to five-person businesses need support if they are to acquire the critical mass that could make them the next eBay—also founded during a recession. There is little research into their needs, but it is fair to surmise a need for better access to credit, skills-based courses in running a business, networking opportunities, tax breaks, and health insurance at rates comparable to other groups.

“Proprietors and micro-business are the lifeblood of the economy,” says Sullivan. But they are ignored or undervalued because their revenues are insignificant compared to those of large corporations and because economic reporting systems fail to capture their data in employment reports.“We count employees, but we do not count the self-employed, even though proprietors and micro-businesses comprised 88 percent of all U.S. businesses in 2006.”

The went on to say that in Massachusetts, and probably the U.S., one in five workers is self-employed. “The household income of millions of families depends on self-employment. And they’re not counted in most employment reports. How can we ignore that many people? How can we ignore their economic potential? Micro-businesses may be small today, but so was Monster.com when it began during a recession.”

Micro-businesses appear to be flying under the radar virtually everywhere. In addition to the nationwide statistics cited above. The Enterprise Center found the same pattern in a sampling of states: Maine, New York, Louisiana, Missouri, Utah and California.

The findings also highlight the opportunity, at national, state and local levels to focus economic development efforts on proprietors and micro-businesses. Sullivan puts it this way: “As long as we focus primarily on making big business bigger, we lose an equally legitimate focus on helping small companies become big ones. The Googles of the future come from small companies. What could we do if we actually looked at how to grow the self-employment option?

The data tables supporting the national trends indicated, along with the complete Massachusetts study are available at www.enterprisectr.org.

The Enterprise Center at Salem State College (www.enterprisectr.org) is a leader in helping proprietors and small businesses grow. As Massachusetts’ preeminent provider of support services to this critical economic sector, it offers incubator space and numerous free programs, including skills-based workshops and one-on-one consulting. Its highly successful initiatives include CEO groups, the 128 Venture North Breakfast series, the Million Dollar Women Symposium and the annual North of Boston Business Plan Competition.

Dr. Laurence E. Goss is a professor in the Salem State College Department of Geography and is affiliated with the college’s Center for Economic Development and Sustainability. He was assisted by Moumita DuttaGupta, a graduate research assistant in the Department of Geography.

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[i]Proprietor revenues are tracked through Schedule Cs filed annually with the owner’s Federal tax return. While wage-and-salary earnings are reported monthly and available almost immediately in Massachusetts, for example, there is an 18-month lag in availability of proprietor data, which appears without fanfare on the website of the U.S. Census Bureau (www.census.gov) and that of the U.S. Bureau of Economic Analysis (www.bea.gov ).

Friday 17 April 2008

North of Boston Business Plan Competition Announces 6 Semi-Finalists 6 Entrepreneurs and New Growth Business Named Semi-Finalists With Diverse Concepts

SALEM, Mass., April 17 /PRNewswire-USNewswire/ -- The North of Boston Business Plan Competition today announced the six semifinalists who will compete for $20,000 in prize money. Hosted by the Enterprise Center at Salem State College, the Merrimack Valley Economic Development Council and the Merrimack Valley Venture Forum, the competition showcases new growth companies in the North of Boston area including the North Shore and Merrimack Valley. An expert panel of 14 judges who are investors, bankers, and community and business leaders selected the six semifinalists this week.

This year's contestants include a virtual computer staffing company, a new type of wireless service provider, an international housing developer, a medical imaging company, a company that uses its patented technology to discover disease and cancer, and an online shoe store.

The six semi-finalists are:

Center for Business Planning (www.centerbp.com)- A Lynnfield based technology company that out-sources virtual business services to clients.

Differential Proteomics - A biotechnical company with offices in Ipswich that uses its patented technology to identify specific diseases and cancer.

Enterprise Homes LLC (www.enterprisehomestanzania.com)- an Andover based international housing developer.

Hotz1.net (www.hotz1.net)- a Gloucester based internet service provider that provides affordable wireless connection to communities and individuals.

Meddart - a Medical Imaging company located in Beverly that is developing an X-ray computed tomography (CT) medical imaging contrast agent to help doctors with diagnostic information.

Poshers.com (www.poshers.com) - a Salem based online shoe store with innovative search technology and other revolutionary concepts.

"The Business Plan Competition is a great opportunity for new businesses to showcase their unique ideas. Contestants go through a rigorous selection process of creating and eventually presenting their plans in front of the most prominent leaders North of Boston. The finalists are truly some of the best emerging companies in Massachusetts," commented Christine Sullivan, Executive Director of the Enterprise Center.

Judges will select the top three contestants on April 23. These finalists will go on to make a public presentation on May 14th at Salem State College's Recital Hall, with the winner bringing home $10,000.

Tuesday April 15, 2008

Creative Economy--Vital North Shore Economic Engine

New study finds $3 billion in annual sales with 17,000+ employees

10% to 12% of workforce

Salem, MA The North Shore creative economy consists of over 2200 organizations, has more than 17,000 workers amounting for more than 10% of the region’s total private sector employment, and is a “significant contributor to the economy of the North Shore” according to a market research report commissioned by the Enterprise Center at Salem State College, the Salem Partnership and the Creative Economy Association of the North Shore. The study was done by ConsultEcon, Inc. in association with Karl F. Seidman Consulting Services.

The study found that five creative clusters account for more than 50% of creative economy businesses in the region. They are design; business and management consulting; engineering/research and development; and artists and advertising. Ten communities contain 72% of creative economy organizations. These include Beverly, Newburyport, Salem, Gloucester, Peabody, Marblehead, Danvers, Lynn, Rockport and Amesbury in that order, but the Creative Economy is represented in every city and town.

“It may surprise people to know that the third largest cluster of creative companies in the region is in engineering/research and development,” said Christine Sullivan, Executive Director of the Enterprise Center, “but creativity and innovation go hand in hand and we have great strength in the technology and consulting side of the creative economy. Biotech in Massachusetts accounts for 3% of jobs. The creative economy in our region alone is over 10%. That’s why we need to focus on it and grow it further.”

This comprehensive report validates what we have believed for a long while; that the Creative Economy is a significant segment of the economy in the region and that the North Shore is where innovation and art meet”, said Patricia Zaido, Executive Director of the Salem Partnership “We have also learned that when creative companies come together they spark ideas and new products and services. Having our cities serve as convergence centers to bring these organizations together is an important recommendation of the report.”

Other findings include:

Creative organizations include both for profit and not for profit entities.
Earlier research has shown that 88% of all North Shore businesses are small. The size of creative economy organizations exactly mirrors the size of all businesses throughout the region.
About 50% of the creative organizations’ customers are located outside of the North Shore, bringing revenue and jobs to the region. As part of Massachusetts’ export economy, these entities bring new dollars into the state. Over 25% of the creative organizations export services outside of Massachusetts.
Educating and attracting talent is essential to the growth of the creative economy. The report recommends that the Workforce Investment Board and the colleges meet to discuss how to ensure students are trained for jobs in this sector.

Mary Sarris, Executive Director of the North Shore Workforce Investment Board, noted that the NSWIB’s recently published Labor Market Blueprint identified a new type of manufacturing existing and thriving on the North Shore. “Deep within the traditional and new North Shore aerospace, life sciences, and computer companies – both large and small –exists a need to continually create new products, services, and ideas. These new innovations become the basis upon which we will continue to have a vibrant manufacturing sector; they are in fact the key to its survival and growth. While manufacturing is not the mass employer of the past, it is through an underlying creative spirit that it will continue to provide high skilled, high paying jobs to local residents and serves as the lynchpin of the overall North Shore economy, connecting us to the rest of the country and the world.”

Recommended actions to support the growth of the North Shore’s creative economy include partnering with each community’s local government, creating convergence locations and events, and convening the local Workforce Investment Boards and area colleges to understand the creative economy workforce needs and develop appropriate training and curriculum plans.

“The Creative Economy mindset – one of invention and innovation – can feed directly into this need to create new and more successful aerospace, life sciences, computer and other in-demand products and services. We here on the North Shore must explore ways to bring these two groups together, so they can support each other and we can truly be the Innovation Center for the global economy,” Sullivan concluded.

The complete North Shore creative economy market analysis and action plan report from ConsultEcon Inc. in association with Karl F. Seidman Consulting Services may be found at www.enterprisectr.org or www.ceans.org or www.salempartnership.org effective April 15, 2008.

For further information:

Christine Sullivan, Enterprise Center at Salem State College

978-542-7039 csullivan@enterprisectr.org

Patricia Zaido

Salem Partnership

978-741-8100 pzaido@salempartnership.org

April 17, 2008 - North of Boston Business Plan Competition announces Semi Finalists

Tuesday April 15, 2008 -Creative Economy--Vital North Shore Economic Engine

September 23, 2005 - "Million Dollar Women" Share Their Secrets

September 7, 2005 - Million Dollar Women Flyer

August 25, 2005 - 128 Innovation Capital Group andEnterprise Center Announce Launch of 128 Venture North

August 16, 2005 - New Fall Programs at Enterprise Center