Home Economy Economic Activity Report: R.I. comprised of mostly small, micro businesses

Report: R.I. comprised of mostly small, micro businesses

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PBN Staff

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06/28/2024

NEARLY 99% OF Rhode Island’s businesses are small businesses or micro businesses, those with 10 employees or fewer, according to a study by The Economic Progress Institute.

PROVIDENCE – The smallest state in the nation is powered by small businesses. Nearly 99% of Rhode Island’s businesses are small businesses or micro businesses, those with 10 employees or fewer counting the owner, according to a study by The Economic Progress Institute. In the State of Small and Micro Businesses in Rhode Island, writer

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PROVIDENCE – The smallest state in the nation is powered by small businesses. Nearly 99% of Rhode Island’s businesses are small businesses or micro businesses, those with 10 employees or fewer counting the owner, according to a study by The Economic Progress Institute. In the State of Small and Micro Businesses in Rhode Island, writer Alan Krinsky, EPI director of research and fiscal policy, examined data from the U.S. Small Business Administration, the Census Bureau, and various other local, state, and national nonprofit organizations from 2019 to 2021, before and during the COVID-19 pandemic. “EPI works to ensure that working people in Rhode Island feel seen, prioritized and supported,” said EPI Executive Director Weayonnoh Nelson-Davies. “In the same way, through this report, we are striving to make sure that small- and micro-business owners – thousands of whom are from Black, Latino, Asian, and Indigenous communities – feel seen, prioritized and supported.” Data showed small and micro businesses employ 228,107 workers, which is 51.2% of Rhode Island’s total workforce, with four out of five businesses being micro businesses that have no employees besides the owners themselves. More women-owned businesses are in the care economy – meaning health care, child care, and other social assistance professions – which, with nearly 2,200 firms, forms the state’s fifth-largest sector but employs more workers than any other sector, according to the report. The report also found the number of Black-owned and Latino-owned businesses in Rhode Island grew substantially before the COVID-19 pandemic and dropped substantially during the first of the pandemic, while white-owned businesses declined slightly before COVID-19 and rebounded slightly during the first year of the pandemic. This suggests, according to the report, that white business owners were more likely than other business owners to obtain federal assistance early in the pandemic. “The institutional racism and barriers to opportunity that exist everywhere in society don’t magically disappear when people of color start their own businesses,” Nelson-Davies said. “However, we can help Rhode Island’s micro- and small-business owners meet their most basic needs and thrive. We can do so in ways that pay attention to the needs and challenges of the state’s many groups defined by race, ethnicity, national origin, and more. And we can do so in equitable ways that decrease income and wealth gaps and build intergenerational wealth.” The report said that investing in high-tech industries and high-paying jobs of the future is a smart investment – but it is too narrow a focus for state economic development and business assistance. “The truth remains that most people work – and will be needed and will continue to work – in other essential sectors of the economy, such as the care economy, for us to function as a society,” the report said. “Most of the businesses operating in the care economy, as elsewhere, are small businesses. Furthermore, most care economy, small-business owners are women, and many are people of color, and they need greater acknowledgment, respect, attention, and support than they have traditionally received.” The several entities in the state, both government and nonprofit, have helpful resources for aspects of running small businesses, the report said there is no single map or guide to all financial assistance [direct grants, loans and microloans, community development financial institutions, neighborhood trusts, tax credits, and help accessing capital including federal funding] and technical assistance [planning, mentoring, accounting, legal, marketing, technological, and networking]. However, the report did tout the R.I. Office of the Secretary of State’s effort response to provide these resources through its Business Services Division in response to calls for a “one-stop shop” for entrepreneurs seeking guidance to create or expand their businesses. The full report can be found here.