It’s the Local Small Business Economy, Stupid
Recently, on LinkedIn, a small business owner posted about the closing of the it retail location. The post was heartfelt and pointed out the difficulty of running a small business in the face of headwinds like tariffs, shaken consumer confidence, inflation, and social instability. What is troubling, is that this storefront appeared to have all the markings of success —speciality products rather than commodities, a high foot traffic location, a commitment to building community as a “third space,” a strong brand presence, and products that offered the ability additional revenue stability from e-commerce. Further, far from being isolated, the owner suggested that the business made use of community agencies supporting small businesses and had advisors and mentors.
When I asked if there were any supports that might have made a difference to keeping their retail location open, their answer was insightful. “If I could dream up one additional support that doesn't yet exist, it would be a fund to support income for business owners while they're in the process of growing their businesses. It's an investment in the long-term sustainability of these businesses that rely on significant risk from business owners for years before their business is really sustainable. Our city is full of business owners not paying themselves, drowning in debt, and teetering on the brink of burnout.”
… Yet in this context, the various levels of government here in Oregon, routinely cut deals including tax breaks and direct incentives to corporations representing technology, semi-conductors, data centers, and now sports team owners. These deals are often valued in the hundreds of millions of dollars per project (1,2). Meanwhile state and local dollars devoted to supporting main street small businesses are the equivalent of a smudge created by pencil shavings in the budget process.
We can trace the thinking of making big bets on Wall Street Corporations, back to disruptive conservative economic theories of the 70s. That period was the birth of public policies that encouraged the concentration of production in those geographic regions offering the largest possible concessions to big business, with public officials repeating the mantra, “There is no alternative,” and arguing that it was trickle down economics that would strengthen the middle class.
This first wave of the disruptive power of corporate growth and consolidation left many communities struggling a find new economic footing. At that point, our economy was in trouble and a rural state governor swept into the White House claiming “it’s the economy stupid.”
Perhaps “it’s the economy stupid” was the right diagnosis, but the solutions offered by the Clinton/Gore administration were to continue the destructive power of corporate concentration (deregulation), further capitulating to the relentless forces of globalization (trade agreements), and perpetuating the practice of victim blaming (welfare reform)(3,4). The creation of the centrist democrat forever blurred the distinction between the two parties in the American political duopoly.
And so here we are, 25 years later in Oregon. Our Governor convened a Prosperity Council comprised of some of Oregon’s elite representing multinational corporations, technology, construction, and private equity to create an economic development plan for our State (5). Not a lot of dramatic foreshadowing required because the recommendations of the council?
I’m shocked. The language of the final council report is coded, but the recommendations continue the destructive power of corporate concentration through deregulation, tax incentives, and giving away our commons. The wealth brokers on the council truly believe “there is no alternative” (6).
But the entire premise of “big is beautiful” economic development approach has failed to equitably build economic resilience for our communities. As long as we ignore alternatives to the “big is better” approach then disparities in our quality of life will continue to worsen.
So we move from a national policy agenda rewarding predatory capitalism, to the State, recommending that we reward predatory capitalism, and we arrive at our local economic development policies.
Which brings me back to the closure of the retail shop from the opening paragraphs. One retail shop closing may not be a canary in the coal mine but when we read news of ten or more restaurants closing in a two week period (7), and countless small businesses quietly closing their doors, we have dead canaries everywhere.
Unfortunately, our dysfunctional local city Council and mayor are locked in hostage negotiations with a billionaire with no leverage and a governor pressuring local representatives to accept that “there is no alternative” than paying the MODA Center ransom. The council appears headed to another dramatic showdown. Meanwhile, dead canaries everywhere.
We need a different economic development vision for our city. An economic vision that starts with the premise that investing in Main Street builds community capital and wealth. There is a growing research base that demonstrates the effectiveness of a hyper-localized economic development strategies and structures. Case studies are emerging that inform the conversation (8).
Local economic development must focus attention on supporting small businesses. Small businesses with fewer than 10 employees account for nearly 80% of all employer firms in the U.S.. While micro-businesses with 1–19 employees drive hiring typically contributing about one-third of all net new jobs.
The criticism of a small business first approach is that the jobs created are more volatile and pay less than a living wage. But it does not have to be that way. Imagine if we supported small businesses the reduce volatility in the equation.
What if the mayor and city councilors (or those running for office this fall) committed to developing dedicated resources to accomplish five objectives:
Prioritize growing local and sustainable production rather than pushing global strategies and measure small business wealth retention & local circulation of that wealth. What gets measured gets invested in.
Foster local business real estate ownership such as property tax reductions for local small businesses purchasing commercial space and committing to keeping the space as retail and/or small scale manufacturing. Rental occupancy costs are crushing many small businesses.
Develop community anchors and social spaces —infrastructure that promotes foot traffic across the 50 business districts of our city (not just in the downtown core).
Focus on zoning ordinances that preserve the unique characteristics of our neighborhoods and free up space for local ownership by pushing out national chains and private equity backed business cartels.
Incentivize small business job creation and movement towards a living wage. Helping business owners add one or two more positions and reducing turnover by fostering living wages, are targeted interventions that not only create jobs but helps take just a little pressure off of the business owner trying to shoulder the burden of two or three jobs.
Entrepreneurs work hard to launch and sustain small businesses, even though misguided public policies tie one hand behind the back of those launching early stage retail or micro-manufacturing business. It is not a fair fight and as the opening paragraphs suggest, many small business owners are fighting exhaustion and are fighting to be heard.
Instead of sitting though endless meetings on the Moda Center (to be followed by another round of arguments over funding a baseball stadium) or squandering public resources on random trips to DC or Vienna, its time for elected officials to show up in their district’s small businesses, don’t talk but listen and learn something. Then co-create with small business owners a new vision for business success that is not just based on the economy but based on the Local Small Business Economy.
(1) Oregon Legislative Assembly, Tax Expenditure Report (2023–25)
(2) Oregon Business Development Department (Business Oregon), Incentives Reports & Program Pages
(3) Economic policy of the Clinton administration. https://en.wikipedia.org/wiki/Economic_policy_of_the_Clinton_administration
(4) Everything Wrong With The Clinton Administration https://www.libertarianism.org/everything-wrong-presidents/everything-wrong-clinton-administration (warning: a libertarian criticism.
(5) Governor Kotek Announces Prosperity Council Members https://apps.oregon.gov/oregon-newsroom/OR/GOV/Posts/Post/governor-kotek-announces-prosperity-council-members
(6) Oregon’s Prosperity Roadmap https://www.oregon.gov/gov/Documents/Oregon%27s_Prosperity_Roadmap_December_2025.pdf
(7) These 10 Portland restaurants and bars have closed in the past two months. What gives? https://www.oregonlive.com/dining/2026/06/these-10-portland-restaurants-and-bars-have-closed-in-the-past-two-months-what-gives.html
(8) Made in Place: Small-Scale Manufacturing & Neighborhood Revitalization. https://www.smartgrowthamerica.org/media/2017/11/made-in-place-small-scale-manufacturing-neighorhood-revitalization.pdf
(9) Principles of Community Wealth Building (CWB)
https://www.democracycollaborative.org/enabling-conditions-and-principles
