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Are entrepreneurs a good community development investment?

Last Updated: December 15, 2011

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Entrepreneurs are a good community development strategy for several reasons. First, entrepreneurs enable communities to build on their existing assets. "Home-grown" businesses frequently emerge from the business operator's talents and interests. Most of these businesses are developed in places where the business operator finds the quality of life high. These businesses are unlikely to relocate to other communities. Second, small businesses are very important to the American economy.  According to the U.S. Small Business Administration, small businesses constitute more than 99 percent of all employer firms, create 60 to 80 percent of new jobs annually, and pay more than 45 percent of the U.S. payroll every year. Third, traditional economic development strategies that focus on industrial recruitment are not as effective as they used to be, especially in rural areas.  Rural areas cannot compete with the lower costs of land and labor in other parts of the world, that is why building on local economic strengths/assets makes sense.

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