While businesses have spent decades fleeing inner cities, their return to Chicago’s forgotten districts has helped create a new economic future for the city. Dyson, whose U.S. operations are headquartered in Chicago, has stated that they’re committed to staying in the city, naming the talent pool and access to diverse markets as assets of the location. Meanwhile, Whole Foods has moved into Englewood, one of Chicago’s poorest neighborhoods. While giants like Dyson and Whole Foods certainly help enhance image, Chicago’s smaller businesses are helping to change the city on a more fundamental level, involving their communities in their economic growth.
The importance of developing inner city businesses in Chicago cannot be understated. Creating a thriving business core attracts new businesses and promotes job creation and wealth retention for local residents, forming a solid foundation upon which the city can build. Research from ICIC on small business job creation shows that small businesses with fewer than 250 employees account for 58% of all jobs in Chicago; furthermore, if every small business in the city added just over one job, inner city unemployment could be eliminated. Despite their importance, nurturing small businesses has not necessarily been an easy undertaking. A study by the Woodstock Institute shows that while businesses in low-income, major-minority areas in Chicago created 8% of business in the area, they only received 3.8% of available loans. The Financial Times reported that the city is hitting a two-decade increase in violent crime, largely seen as a response to desperation felt by the city’s residents because of a lack of opportunity.
The major driver of this opportunity drought is an obstacle faced by many urban businesses: insufficient access to capital and external resources that could help drive growth. Understanding these needs, in 2005 ICIC launched Inner City Capital Connections (ICCC), a national program that positions inner city businesses for long-term success. Through the program over 100 Chicago businesses have received executive education and coaching that helped them develop and practice skills to grow, create jobs, and raise capital. So far, the Chicago participants have successfully raised over $80 million in capital and created 423 jobs.
One example of how support services for inner city businesses can create growth and opportunity is Microlution, a precision manufacturing company headquartered in Chicago. Microlution, founded in 2005, participated in ICCC so that CEO Andy Phillip could realize his goal of acquiring growth capital. The program helped him understand what different types of investors are looking for in a business, an education that led to $1 million in debt financing for Microlution, and allowed them to expand their workforce and create growth. 2015 was a record year for Microlution, as they achieved their highest profits ever. Since ICCC, Microlution has seen revenue growth of 21% and a 16% growth in its number of employees, all from its headquarters in Chicago’s Dunning neighborhood.
If cities like Chicago are to see success in their efforts to grow businesses in low-income neighborhoods, they need to look beyond the issues of zoning, parking spaces, and taxes. If opportunity is to grow and positive changes in the unemployment rate are to occur, Chicago must cultivate its existing small businesses and ensure that resources are in place to assist with sustainable business growth. Companies like Microlution have proven that when given the appropriate resources, they’re capable of creating local jobs and wealth. Chicago’s inner city future will be bright so long as the resources are made available to businesses that have taken root there.
ICIC drives inclusive economic prosperity in under-resourced communities though innovative research and programs to create jobs, income, and wealth for local residents.
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