The nation’s largest philanthropically funded economic development program is touting big gains this week, posting numbers that show positive impact for entrepreneurs and small businesses in the Detroit region.
Since 2007, 12 local and national organizations have united under the banner of the New Economy Initiative (NEI) to provide grant dollars and create programming for southeast Michigan’s small businesses and entrepreneurs. In that time, NEI has awarded 259 grants totaling $96.2 million. According to a new analysis, that investment, together with an additional $600 million in capital raised by NEI grantees and $232 million of matching program dollars, has resulted in the creation of an additional 1,610 new companies in metro Detroit. Nearly 40 percent all these companies are minority-owned — double the national average — and 32 percent are woman-owned.
In addition to directly providing financial support to small businesses, NEI has funded 42 nonprofits that provide support to entrepreneurs. Some provide business growth support, others market analysis or venture capital, or co-working and lab space. TechTown, for example, one of NEI’s largest investments, begun as a high-tech business incubator but now also supports retail, food and hospitality, service, and other businesses. A total of 4,400 companies across southeast Michigan have received services from those NEI-funded organizations thus far. Of these, 31 percent are women-owned, 30 percent are owned by people of color, 29 percent are in the technology sector, and 21 percent are in the city of Detroit.
(Credit: New Economy Initiative)
“NEI rightfully recognizes that entrepreneurship isn’t the exclusive domain of the privileged. We believe in the power of inclusion and know that when opportunities are made available across communities, entrepreneurship can be a powerful means of addressing inequality,” said Darren Walker, president of the Ford Foundation, an NEI funder, in a statement. (NEI funders include Next City supporters Ford Foundation and the Surdna Foundation.)
According to the analysis, conducted by PricewaterhouseCoopers and the W.E. Upjohn Institute for Employment Research, NEI-funded companies and programs have also directly or indirectly contributed to the creation of 17,490 new jobs. About 70 percent of those jobs are in Detroit’s Wayne County. An additional 1 million square feet of entrepreneur-related spaces have been created through the initiative, and 179,571 people attended entrepreneurship events in metro Detroit.
The report tallies a total of $2.9 billion in real output for NEI grantees, and $1.9 billion in real gross domestic product generated by NEI-supported companies.
“Taken together, these studies show that entrepreneurs in Detroit and southeast Michigan are finally getting the support they need, and that is making a real impact on the regional economy,” said Pamela Lewis, director of NEI, in a statement. “People of all kinds are embracing entrepreneurship as a means of creating opportunity and prosperity. There’s a great deal of work remaining, but Detroit is without question on the right path.”
The report also includes lessons learned from the first nine years of NEI’s efforts. Detroit may have lost about 367,000 manufacturing jobs between 2000 and 2010, but NEI tried to focus on the assets the region still had: the largest concentration of engineers in the world, several top-tier universities, and a history of technological innovation. NEI also considers inclusivity central to its success, and stresses that the central city and region must be supported and strengthened together. The report also profiles several NEI-supported businesses, from grassroots to high-growth ventures in the medical, educational, and food sectors, and more.
Jen Kinney is a freelance writer and documentary photographer. Her work has also appeared in Philadelphia Magazine, High Country News online, and the Anchorage Press. She is currently a student of radio production at the Salt Institute of Documentary Studies. See her work at jakinney.com.