Study shows small businesses main job creators in Missouri, nearby states

Locally owned small businesses are responsible for nearly all the new net jobs in the Mississippi River Delta region, according to a new study by the Delta Regional Authority, a federal-state partnership working to stimulate economic development.

During a news conference at Broadway Prescription in Cape Girardeau on Monday, Delta Regional Authority federal co-chairman Chris Masingill called small businesses the "growth engine" of the region as he presented the study prepared by Dr. James Stapleton, executive director of Center for the Innovation and Entrepreneurship at Southeast Missouri State University.

The release of the study coincides with Small Business Saturday, set for this Saturday -- a day dedicated to supporting small businesses nationwide by encouraging consumers to shop at them -- and entrepreneurship month, which is celebrated during November.

Since 1992, locally owned businesses with nine or fewer employees created 91 percent of the net new jobs in the eight-state region that includes Alabama, Arkansas, Illinois, Kentucky, Louisiana, Missouri, Mississippi and Tennessee, the study showed.

"We want to make sure we're drawing that connection," Masingill said. "We hope it will be used as a guide by our governors, our strategic partners, our policy makers and our traditional economic developers as we look at where the jobs of tomorrow are coming from."

Instead of looking at the employment or unemployment numbers many other economic studies focus on, this study looked at the opening and closing businesses that created or eliminated jobs.

Stapleton reviewed data from January 1992 through January 2010 in the 252 counties and parishes that make up the eight-state Delta region.

The findings suggest the Delta region has become increasingly dependent on locally owned small businesses to provide jobs. Companies with nine or fewer employees provided nearly 42 percent of all jobs at the beginning of 2010.

"In some ways it was confirmatory of what we'd thought all along," Stapleton said.

Stapleton said he did not expect to find the drastic difference between the 1991 and 2001 recessions and recoveries, or in the case of the 2001 recession, the lack there of.

"There are vast differences that are quite alarming," Stapleton said.

While more new businesses were created in the second half of the data period, they provided fewer new jobs.

"In the growth years of the '90s they were able to replace the jobs lost when businesses closed. Businesses are closing that may have 10 or 15 employees and businesses are opening that only have one or two," he said.

In Missouri, the study showed the state had a net decrease of 3,315 jobs from 1992 to 2009.

Additional state-specific data will be released in about 60 days, Stapleton said.

Masingill said Stapleton serves as an adviser for small business and entrepreneurship for the entire Delta Regional Authority area.

"He has educated me and helped bring me around. I have been a traditional economic developer for most of my career, but this idea of focusing in on entrepreneurship as a way to anchor economies and grow opportunities -- he has shown me the way to do that," Masingill said.

The study will be used as a tool by the Cape Girardeau Area Chamber of Commerce, which already has been working on supporting entrepreneurship as one of its five main strategic goals, said Tim Arbeiter, vice president for community development at the chamber.

"We've always known small business ownership and entrepreneurial development have always been important to Cape Girardeau. This research gives us the necessary data to validate that," Arbeiter said.

Stapleton was assisted by graduate student Justin Pobst and undergraduate student Mitchell Brunson.

mmiller@semissourian.com

388-3646

Pertinent address:

710 Broadway, Cape Girardeau, MO