Aaron Melaas: We were both pretty new at CRE when we got started on the 2021 report, and as we looked at the way the index had been put together in the past, we realized there was a very strong focus on economic growth and development, especially in the tech sector, but not much attention paid to questions of access to economic opportunity. Broadband access is a simple but helpful measure of people’s ability to tap into the high-tech economy. And housing affordability tells you whether people can afford to live in these communities in the first place.

Melaas: The index rankings changed fairly substantially. Some cities that had ranked very, very highly in the past, such as San Francisco and San Jose in California, didn’t rank quite as highly once we tried to account for access to opportunity.

Melaas: During the pandemic we started to see very clearly that access to opportunity doesn’t look the same in all metros, and that microbusinesses were potentially a really interesting complement to that work. But microbusiness activity is not necessarily captured in the indicators we use for BPC. It became clear that our approaches dovetailed nicely.

Charlotte Kesteven: We knew that microbusinesses are super important in the overall economy, but we imagined the pattern would be similar across the board. But the variation is huge. Some cities have a few really big industries and almost no microbusinesses, and some have the opposite. Some have both.

Kesteven: Yes. We found some geographic variation from one region to another. In the Midwest, for example, cities like Chicago, Cleveland and Detroit that didn’t look very good from a BPC perspective in the past rose in the rankings. Once we began looking at the Venture Forward data, we saw surprisingly high microbusiness activity. The VF data helped us see that yes, there are a lot of good things going on in these places.

Melaas: Provide quality broadband access, across the income spectrum. I think before we began working with VF, we tended to view broadband access as not exactly a luxury, but not a necessity. The pandemic made it abundantly clear that broadband is fundamental to succeeding in the 21^st century economy.

Melaas: Absolutely. For example, there are tons of skilled workers in places like Chicago and Detroit who no longer have the opportunities they once did in the manufacturing sector. We’re only scratching the surface of people’s potential to build online businesses, by translating their skills for a new purpose.

Melaas: One of the real crucial insights is that microbusiness density can complement the kind of high-tech activity that we traditionally look at in BPC. But it can also help cities fill in gaps, to overcome constraints on growth by making them less dependent on their existing dominant industries. For example, adding online microbusinesses can help you reach consumers anywhere in the global market.

Increasing microbusiness density can provide another set of economic opportunities for residents in the present, and potentially safeguard you if there’s a downturn in your core industries.

Melaas: Fresno, California, jumped out to us as a candidate. It scored relatively high on the index, but lower on microbusiness density. It seems that a strong agribusiness economy provided for fairly strong job growth and decent wage growth. But probably because of lower levels of broadband access and potentially because of lower levels of education and a large population of people for whom English is not their first language, people weren’t pursuing microbusiness opportunities.

Melaas: Absolutely. Our work with Venture Forward has led us to ask important new questions about what the economy is going to look like in the future. We hope this is just the beginning of a dialogue with Venture Forward and certainly with policymakers and business leaders to ensure that access to opportunity is as broad and equitable as possible.
  
Kesteven: This project highlighted for me that economic success in a city is not as valuable if it’s not available to everyone that’s there. I think that’s why looking at issues of access to opportunity is so important to us.