‘Small but mighty’: Microbusinesses are unsung heroes of Baltimore’s economy

Baltimore may have a hidden economic talent: microbusinesses.

The metro area has 192,000 online microbusinesses, with 32,500 in the city limits itself. That’s a greater density of microbusinesses than many comparable cities and with that comes a greater positive economic impact, according to Venture Forward, a research initiative from web domain provider GoDaddy.com.

Microbusinesses are the people selling platters on Instagram, advertising commissions for art, or styling hair and using a site to book appointments. A hustler by any other name. What makes them mirco is that they’re often one-person shops. Or, if there are employees, the businesses are still too small to be using an employee identification number. They also might be too small to be on the radar of local small business organizations, but they make an impact on the community and economy nonetheless.

“You can’t create policy for what you can’t see,” Jim Hock, a chief of staff for the U.S. Department of Commerce during the Obama administration, said to the Venture Forward researchers when they talked about the data with former policymakers.

GoDaddy, through its research initiative with Venture Forward and partnerships with universities like the University of Iowa, Arizona State University and UCLA, has spent two years looking at data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics and the Economic Innovation Group. They also examined their own data and research on GoDaddy users to quantify the impact of microbusinesses and solo-entrepreneurs on the local economy.

“They’re small but mighty,” Robert Brown, senior director of customer insights and analytics at GoDaddy, said of microbusinesses.

Through the research, GoDaddy found a lift in household median income by $500 in communities with an active microbusiness. Every microbusiness creates at least two jobs upon creation, and they make local economies more resilient through pandemics or other economic disasters.

The Baltimore metro area, according to GoDaddy’s data, has an affinity for microbusinesses. There are more of them here than in an average city, and collectively they have a higher impact on the economy. Their presence can underlie trends: In the Baltimore area, the three-year change in median household income increased by $8,797, versus the national average of $5,561.

“There’s this relationship between this type of [microbusiness] activity and these sorts of economic outcomes,” said Brown. “We think that it’s important that policymakers understand that there’s a lot of this activity going on, and it’s having this positive impact that they might not be able to explain without understanding what those relationships are.”

 

What microbusinesses need is what any other business needs: better access to capital, more digital literacy training, broadband access, and the sorts of grants and programs that help entrepreneurs get their ventures off the ground. Where a microbusiness differs from a small business is the amount of assistance needed to make an impact. A small business might need a few thousand in subsidies to get off the ground, where a microbusiness only needs a few hundred.

The data indicates there’s an opportunity: Baltimore has a chance to support microbusinesses and carve out a niche, as it already seems to outperform larger cities.

Donte Kirby is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation.