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Report

A New Agenda for Small Business Support in an Age of Uncertainty

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Kristen Fanarakis

Associate Director, Small Business, Entrepreneurship, and Economic Growth
Kristen Fanarakis leads the small business, entrepreneurship, and economic growth initiative within the Milken Institute’s Finance pillar. She focuses on macroeconomic and systemic trends affecting American small businesses and startups, and their implications for the economy and innovation.
A headshot of a man named Alexander Meeks. He is standing against a blurred background and smiling at the camera. He has brown skin, a short dark brunette beard, short dark brunette hair, and brown eyes. He is wearing glasses and a gray collared polo shirt.

Alexander Meeks

Director, 10,000 Communities Initiative, Milken Institute Finance
Alexander Meeks is a director at Milken Institute Finance. He focuses on helping communities accelerate resilient disaster recovery and adapt to extreme weather events.
Topics
Finance
Small Business Strategies
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Entrepreneurship requires accepting uncertainty. Yet today’s small businesses face multiple, compounding, and, at times, unprecedented sources of uncertainty, ranging from economic and policy volatility to climate-related chronic stressors and acute shocks to technological disruptions. Small businesses are the engines of US employment and economic growth. Our broader economy is at risk if business owners cannot plan for and adapt to this new world.

It is time for the ecosystem of support organizations to adapt to the modern reality faced by the small businesses they serve. New models are needed to help small businesses build their “adaptive capacity” so they can not only survive but also thrive despite this uncertainty. 

This report outlines the key areas of uncertainty that small businesses face and presents a four-point agenda to help business support organizations become more adaptive in how they support the businesses they serve.

  1. Holistic shared data: We need access to higher-quality, up-to-date data that track the broad trends affecting small businesses today, shared seamlessly among institutions. 
     
  2. Ecosystem-wide collaboration: Lenders, government, philanthropy, and advocacy organizations must cultivate strong, trusting networks before disruption to enable adaptive business support during disruption, which will require proactive financial and political support for durable partnership-building.
     
  3. Flexible financing: Small businesses need access to flexible financial products that give them breathing room during periods of profound and extended uncertainty. The efforts of community development financial institutions and other community-based lenders offer workable models.
     
  4. Facilitated AI adoption: The smallest businesses, which have the most to gain from AI, are least likely to have adopted it. Every organization that supports small businesses should build AI integration and adoption into its business interactions (e.g., loan applications and coaching), a more effective approach than standalone or ad hoc AI training programs.

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