The fifth in a series of posts focused on insights from the National Center for the Middle Market’s research initiatives, this article focuses on the ways in which economic development organizations can support local mid-sized businesses that create jobs and serve as the economic bedrock of their communities.
The recent and ongoing bidding war to win Amazon’s second headquarters clearly demonstrates the willingness of cities and counties to pull out all the stops to attract new businesses. The problem with this strategy—focusing on recruiting individual firms—is that it takes resources away from what is likely a much surer approach to sustainable economic development: namely growing from within by focusing on the businesses that are already there. Indeed, the Center’s research partner, the Brooking Metropolitan Policy Program, listed organic growth as one of the five key actions needed to achieve the full promise of economic development.
Local middle market firms in particular are worthy of attention. Not only do these businesses account for the majority of new job creation in the private sector (the year-over-year employment growth rate for middle market firms was 6.7% for the second quarter of 2018, as reported by the Middle Market Indicator), they are also exceedingly loyal to their hometowns. In the Center’s research for our Ohio and Illinois Middle Market reports, we found that many middle market companies are located in a specific city because that’s where they started and that’s where they intend to stay. They often have deep connections to their communities and no plans to relocate or take their business elsewhere.
So, how can economic development and other local organizations and institutions support the middle market businesses that are crucial to their communities’ ongoing prosperity? Here are a few ways the Center is working with different metropolitan areas to support stronger middle market growth:
Chicago
The Center recently partnered with the Chicagoland Chamber of Commerce to create a report on the state of the city’s middle market businesses and to provide insight into past performance and future projections of middle market leaders. We shared the findings with more than 100 Chicago-area business and community leaders at a Chicagoland Chamber event in April 2018. The Chamber plans to use the findings to gear future programming toward the specific needs and challenges of its middle market business leaders.
Cleveland
Since the Center’s inception, we have worked closely with the Greater Cleveland Partnership (GCP), one of the largest metropolitan chambers in the nation. We helped GCP design and launch the Greater Cleveland Middle Market Forum event in 2012 and have participated in the event every year to present the latest research and moderate panel discussions on topics ranging from workforce woes to export readiness. The Center’s Managing Director, Doug Farren, holds a seat on the GCP’s Middle Market Action Committee, which works to connect and activate middle market organizations in Northeast Ohio and ensure that their voice is heard by community leaders, policy makers, and service providers.
Philadelphia
Greater Philadelphia has committed to being a top region for the middle market with sustained double-digit growth. To that end, the Chamber of Commerce for Greater Philadelphia asked the Center to help design a research survey in collaboration with McKinsey to define the middle market’s importance to the region, identify what drives the performance of local middle market companies, and to uncover ways in which organizations can support the middle market in maintaining or exceeding its high rate of growth. The Chamber’s Middle Market Action Team—a group of 70+ key stakeholders and top middle market executives in the area—continue to leverage the report's key findings to raise community awareness of the middle market’s unique challenges and to pave the way for accelerated middle market growth.
Find out how the Center can help you better understand your city’s middle market.
The Center actively pursues relationships with local organizations that share our interest in the middle market’s success. Using data from the Middle Market Indicator, we can help create a snapshot of middle market performance in your region. We are ready to discuss ways in which the Center can partner with you on events and initiatives that can bring your local middle market together, give it a voice, and ensure its needs are better met. To learn more, contact the Center today.