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As our nation turns its weary and anxious eyes away from the election, we are thinking hard about what comes next. We are entering into one of the worst phases of the COVID pandemic with massive uncertainty about what type of stimulus will come and when.

Our message here is a simple one: local economic stakeholders cannot afford to wait to proceed until the federal fog of uncertainty lifts. They must start organizing now.

As we wrote in early April, local economies did not have the luxury of waiting for federal action on small business relief. Today’s situation is similar, but different in one key respect: rather than just emergency relief, what’s at stake is a recovery that will shape the next decade (and longer) for local economies. In March, local stakeholders across the country set up local small business relief funds before the federal government could act. Today, action is needed on a vaster scale which organizes public, private, and philanthropic stakeholders locally to provide versatile channels for directing resources for a recovery—regardless of where the federal government settles.

The COVID-19 crisis is the greatest economic shock since the Great Depression, and it is landing hardest on our nation’s small businesses, the heart of local economies and community life. The pandemic has reminded us of the outsized role small businesses play in our economy, employing 47% of the U.S. workforce, generating two-thirds of new jobs, and serving as a critical path to economic self-sufficiency. But the pandemic has also revealed not only the fragility of many of these enterprises but profound deficiencies in how they are supported by federal policies, private practice, and local action.

To that end, a group of us (see full list below) have prepared Big Ideas for Small Business. Special thanks are due to Nate Loewentheil and Jamie Rubin for conceiving of this project back in the spring.

One of the best parts of my job is the chance to work with reflective practitioners from around the world. These individuals are often at the vanguard of problem solving in our societies, given their unusual combination of subject matter expertise and hard-earned practical experience. This is the essence of New Localism and helps explain the rise of city and metropolitan networks as key agents of change.

I am participating next week in a UK conference on Creating Communities: Places beyond the Pandemic (creatingcommunities.co). The conference is designed to wrestle with the central question: How can place-based policy and regeneration enhance communities and prosperity?

To prepare for the conference, the organizers (a new think tank called Onward) asked me to reflect on what New Localism means in an Age of Pandemics. This is an expanded version of what I contributed.

COVID-19 and the fallout from it confronts Philadelphia with series of overlapping health, economic, fiscal and social crises. These are perhaps the deepest crises the city has faced in modern memory, but its roots are not new. COVID-19 has accelerated and reinforced deep challenges the city was facing even before the pandemic struck — crises of equity and inclusion, of overcoming inequality and deeply concentrated urban poverty, of building a more robust, sustainable, inclusive and resilient economy. It has become something of a cliché to say a crisis is a terrible thing to waste. But we surely can’t waste this one. There is a rare opportunity and obligation to finally address the deep challenges and overlapping crises facing Philadelphia, and build the city back better.

Throughout the COVID-19 crisis, small businesses have been struggling. As discussed in earlier newsletters, federal relief efforts like the Paycheck Protection Program (PPP) have left too many behind, and the economic road to recovery will be lengthy. Throughout the summer, then, we’ve been working to understand the state of small business prior to the COVID-19 crisis, as a baseline to guide the substantial work that needs to be done during and following the pandemic. This focus has led a group of us to conduct national and state-level analyses of the Annual Business Survey, trying to understand specifically the state of Black-owned businesses in America. We have also done a deep dive into the work of foundations, think tanks, consultancies, constituency organizations, government, and academia to understand what strategies have been deployed in the past to promote economic inclusion and equitable growth.

Five months into the COVID-19 crisis, the outlook for the country’s small businesses is as murky as ever. COVID-19 cases continue to rise across the country, slowing and halting many states’ reopening plans. Even if we were as far along in combatting the virus as we had expected to be in mid-July, small businesses’ path to recovery would be extraordinarily challenging.

The country’s small business problems existed long before COVID hit. America has not been forming new business or increasing economic dynamism at a sufficient rate since the Great Recession. The most recent set of SBA data revealed disturbing trends for Black-owned small business: their share of all employer firms underrepresents the size of the Black population, they are smaller and have lower revenues, and they are highly concentrated in a few sectors. These issues have only become more pronounced due to the coronavirus crisis.

As Congress negotiates the next COVID-19 relief package, it is clear that the size and incentives surrounding unemployment benefits will be a major focus of contention between Republicans and Democrats in the Congress. We add another proposal to the mix: use unemployment insurance to encourage entrepreneurship as well as traditional employment. At present, in all but five states unemployment insurance only encourages employment pathways into traditional salaried jobs offered by existing companies, even though there are not enough jobs to go around. Fortunately, a solution already exists and is underway in those five states — Delaware, Mississippi, New Hampshire, New York, and Oregon. It’s time to expand it across the nation.

Our recent analysis of the US Census Bureau’s 2018 Annual Business Survey revealed that there are 124,000 Black-owned employer firms in the US, representing only 2.2% of all employer businesses even though Blacks make up 14% of the US population.[1] Black-owned employer businesses are smaller, with fewer employees, lower average revenues, and lower average payroll expenditures, than businesses overall. That’s partly because these firms concentrate in sectors of the economy that pay less and offer fewer opportunities for productive growth.

We are heartened by the new energy emerging across multiple sectors to rectify these longstanding disparities. On June 30th, for example, Netflix committed $100 million to reduce the racial wealth gap, jumpstarting the effort with a $25 million partnership with the Local Initiatives Support Corporation. The Netflix commitment, like other corporate efforts over the years, has focused on providing Black entrepreneurs and businesses with greater capital access. This is essential given the structural racism that has permeated the financial sector for generations.

My colleagues and I recently completed an analysis of the 2018 Annual Business Survey to identify the state of Black-owned business on the eve of COVID-19. To refresh: our topline finding showed that there are 124,000 Black-owned employer firms in the US, representing only 2.2 percent of all employer businesses. Black-owned employer businesses in the U.S. are smaller, with fewer employees, lower average revenues, and lower average payroll expenditures, than businesses overall. A key — but not sole — reason for this is because these firms concentrate in sectors of the economy that pay less and offer fewer opportunities for productive growth.

This week we drill down further to assess the varied performance of the states on this important topic. This assessment is timely given the important role that states have taken on during the COVID-19 crisis and the underlying powers and resources they have at their disposal.