About MicroBizNY - Economic development in NY State
History and Mission | Our Goals | Economic development in New York State

Economic Development: Building Assets, Businesses and Revenues
& Microenterprises in New York State

After a decade of operation, microenterprise development programs in the U.S. are creating jobs, generating income, building assets, and enhancing skills. These results are particularly impressive considering the fact that a significant proportion of assisted micro entrepreneurs are individuals facing obstacles presented by race, gender, ethnicity, income, and local barriers as well as job market fluctuations. Whether the business is the sole source of family income or a crucial supplement to family earnings, microenterprise development has put many low-income families on the road to self-sufficiency.

By generating new economic activity, microenterprise also increased public tax revenues and private incomes, thereby reducing dependence on public assistance, which in turn helps shrink public budgets. These significant social and economic benefits far outweigh the cost of public and private investment in microenterprise development.

Microenterprises in New York State

Based on a recent analysis of New York State’s labor market there are approximately 1.5 million microenterprises operating throughout the state. These microenterprises employ approximately 19% of the state’s entire workforce. Furthermore, a 2000 analysis of the state funded Entrepreneurial Assistance Program (EAP), prepared by Empire State Development Corporation (ESDC), demonstrated that each job created through the EAP cost the state only $1,600 and that for every $1 spent on the Entrepreneurial Assistance program, $2 in tax revenue was generated. These numbers are merely the tip of the iceberg and clearly show the importance of the microenterprise sector as it relates to the states economy.

MicroBizNY will be the new voice for microenterprise development organizations throughout the state. For too long microenterprise has been overlooked as an integral part of this state’s economy. SENSES, thanks to the Association for Enterprise Opportunity (AEO), has new data showing the importance of microenterprise to the states employment base (methodology developed by Professor James McConnon, along with Thomas Allen, both of the University of Maine). The data shows that New York State has over 1.9 million people employed by approximately 1.5 million microenterprises (a business with 5 or fewer employees). A whopping 19 percent of the state’s workforce is employed by a microenterprise (please see chart showing county by county impact of microenterprises). In the New York City metropolitan area it is evident that the economies of the outer boroughs are driven by microenterprises. On average, 30 percent of the workforce in Queens, Brooklyn, Staten Island and the Bronx are employed by microenterprises.
Click here for county by county analysis.

The economies of very rural communities are also dependent on microenteprises. In Hamilton County approximately 35 percent of the workforce is employed by microenterprises, while in Greene County the number is 27 percent. The reality that many fail to acknowledge is that microenterprises are driving the economies in both very urban and very rural districts.

The other reality that we must acknowledge is that microenterprise development organizations (MDO’s) across the state are creating jobs and businesses at a much lower cost than most other job creation programs the state offers. The Entrepreneurial Assistance Program (EAP) is one of the only state funded microenterprise training and technical assistance programs in New York State. This program funds 23 MDOs that provide classroom training and follow-up technical assistance to women, minorities, individuals with disabilities, and dislocated workers that want to start or expand their own microbusiness. The EAP, in its annual program report to the Governor, estimates that jobs were created at an average state cost of just $1,600 per job. Comparable programs such as the Job Development Authority and the Jobs Now Program estimate a cost of $35,000 and $10,000 per job respectively. Perhaps the most enticing aspect of the EAP however comes from an ESDC cost benefit analysis of the program, which conservatively estimated that the state would receive two dollars in income tax and sales tax, for each dollar they invested in EAP. These figures clearly show that microenterprise development is a cost effective economic development tool that needs to be expanded.