When people describe a vibrant community, they rarely start with a warehouse or corporate office. They talk about the restaurant where the owner knows their family, the barbershop where neighborhood children grew up, the childcare center, the local bakery and the small grocer. These businesses create everyday community access: places to go, people to connect with and reasons to participate in local life.

We all know personally how much small businesses give us every day. They create local jobs and generate income that stays in our communities. They create places to gather and bring a feeling of aliveness, connection, conversation and pride to our neighborhoods. They give people the opportunity to build something of their own while helping create the communities in which the rest of us want to live. Importantly, they are a pathway to livelihoods and economic stability for immigrants who make up a growing proportion of people living in our communities.

For all of this immense value, however, much of our taxpayer-backed economic-development spending and institutional capacity remains focused on attracting major corporations and large development projects. Good Jobs First estimates that state and local governments provide corporations with as much as $90 billion each year in economic-development subsidies. In one analysis of more than 4,200 incentive awards across 14 states, large companies received 90 percent of the dollars, leaving only about 10 percent for small, locally owned businesses—even among programs that were technically open to businesses of any size. Good Jobs First has also documented 240 individual “megadeals,” each worth at least $75 million, with a combined public cost of more than $64 billion. 

This reflects a narrow definition of prosperity. We measure the number of jobs promised, the dollar value of an investment, the square footage developed and the tax revenue projected. Those measures matter, but they do not tell us whether an investment is helping people build stable lives, own business assets, increase their incomes and remain connected to their communities. The question is not simply whether the economy is growing, but whether that growth is creating widely shared prosperity. Small businesses are central to that promise because they allow more people to build wealth, shape their own livelihoods and have a lasting stake in the communities they call home.

This is not an argument that large employers or major investments have no place in an economic-development strategy but rather that our institutional structures should reflect the full range of things we say we value. At a time of eroding institutional trust, weakening community ties and an economy that has concentrated wealth and ownership for too long, we must confront a central contradiction: we celebrate entrepreneurship as an American ideal, while underinvesting in the conditions that allow entrepreneurship to become a broad and reliable pathway to prosperity.

Why now

Americans filed approximately 5.62 million applications to start businesses in 2025. That is a surge in entrepreneurship that began during the pandemic and reversed a multi decades-long period of declining business formation. In California alone, nearly 554,000 applications were filed—about 52 percent more than before the pandemic in 2019. The sustained rise in applications marks a significant shift from earlier patterns of business formation and tells us that Californians – and Americans - still possess a strong desire to build something of their own. 

Filing an application is only the beginning, however. For many entrepreneurs, the path from starting a business to sustaining and growing one becomes a systematic course of no. They have no collateral, no established banking relationship, no procurement history, no family wealth, no affordable commercial space, no clear path from training to capital, contracts, and growth. These barriers are often treated as individual deficiencies. But taken together, they reveal how our institutions are designed. Economic-development systems tend to recognize businesses that already possess scale, assets, relationships and a record of prior success. 

This is where race, gender and class become inseparable from the small-business conversation. Access to wealth, property, credit and professional networks has never been distributed equally. When those assets become the primary evidence that an entrepreneur is worthy of investment, institutions reproduce existing inequality even when their rules appear neutral.

The contrast with large corporate projects is revealing. Major companies arrive with lawyers, consultants, financial institutions and government-relations teams. Their scale is treated as evidence of public value, and institutions organize themselves around securing the investment. Small-business owners must navigate a fragmented system themselves and prove their value at every step to lenders, permitting agencies, procurement officers and technical-assistance providers.

The problem, then, is larger than unequal funding. We have built an economic-development system organized to attract and accommodate scale rather than identify potential and helping it scale. Transformation will require changing what our institutions are designed to see, value and invest in.

We’re not starting from scratch

California does not lack organizations committed to helping small businesses. Across the state, chambers of commerce, community lenders, technical-assistance providers, economic-development agencies, government programs and nonprofit organizations are doing important work.

What is true though is that many of these organizations are competing for the relatively small share of funding and institutional attention left over after major corporations and development projects have received the largest investments. Programs are often funded separately, for limited periods, and around narrow activities. Each organization must pursue its own grants, meet its own requirements and demonstrate its own results. 

Unsurprisingly, this produces a fragmented ecosystem. For someone running a business, managing payroll, serving customers and caring for a family, that burden can become overwhelming. Business owners do not have unlimited time. Often, they have no time at all.

The challenge is even greater for entrepreneurs who have historically had less access to capital, professional networks, and trusted advisors. A business owner may be ready to expand but unable to qualify for a conventional loan. Another may qualify for financing but lack the operational support needed to use it effectively. Others may never hear about available resources because outreach does not reach them in their language or geography.

Today, we do not lack good programs or committed people. What we have is a collection of organizations forced to compete for limited funding while also being expected to provide entrepreneurs with a seamless path through the system. That is an impossible standard without deeper coordination and investment. A functioning small-business ecosystem requires sustained funding, shared infrastructure and a common definition of what prosperity should produce.

New Models Are Emerging

SCALE Fresno began taking shape in 2024 around a simple question: What if the organizations supporting small businesses coordinated their funding, services and referrals so entrepreneurs could move through one connected system rather than a series of separate programs?

That is what The James Irvine Foundation is supporting through SCALE Fresno: coordinated funding for a coordinated regional approach. Rather than making isolated investments in individual programs, the model invests in the ability of organizations to work together around a common goal and shared plan. One year in, SCALE Fresno has maintained partnerships across more than 20 lenders, business-support organizations, public agencies and community partners. 

The organizations are building the elements of a functioning small-business ecosystem through an Investable Plan that identifies coordinated projects for public, private and philanthropic partners to support. The plan calls for more than $30 million in flexible capital for Fresno County entrepreneurs, including microloans, grants, credit-building products and other tools designed to address persistent financing gaps. It also sets goals for the number of businesses served, the expansion of industry-specific support and greater reach into rural communities.

If done right, the potential impact is significant, Fresno County. Fresno County has more than 65,000 businesses without paid employees and 19,144 employer establishments, nearly 95 percent of which have fewer than 50 employees. The county is also home to more than 5,400 minority-owned employer firms, in addition to thousands of minority-owned businesses without employees. Helping even a portion of these businesses become more stable could have a meaningful regional impact. A self-employed entrepreneur who hires one or two people creates new jobs, a small company that increases revenue can support higher wages and a business that becomes creditworthy and profitable can also become a source of long-term wealth for its owner’s family.

After a year of developing this model, SCALE Fresno is convening the SCALE Success Summit on September 16–17 to bring these ideas into public view, share lessons from the field and examine what still needs to be built. The Summit organizes the conversation around the five connected areas at the heart of the SCALE model:

Systems asks how entrepreneurs can be placed at the center, with shared standards and stronger coordination among organizations. The system, rather than the business owner, should take responsibility for connecting the pieces.

Capital asks whether entrepreneurs can access the right kind of financing at the moment they need it and through a partner they trust. This includes recognizing that immigrant entrepreneurs may have viable businesses and reliable customers without the conventional credit history or banking relationships traditional lenders expect.

Access asks whether support is usable to the businesses it is intended to serve. Services must be offered through trusted organizations and in the languages, locations and formats entrepreneurs can use.

Leadership recognizes that strong businesses depend on strong organizations. Lenders, chambers, technical-assistance providers and community organizations need the staff, technology, partnerships and sustained funding required to support entrepreneurs beyond a single class, loan or interaction.

Evidence asks whether the system is  producing stronger businesses. Better data can show who the region’s small-business owners are, what they need, which approaches are working and where entrepreneurs are still falling through the gaps.

The SCALE Success Summit creates an annual opportunity to examine these questions and improve the ecosystem together for the hundreds of other communities with promising small businesses. It is also making a broader statement: the time has come to invest in small-business systems with the same level of coordination and intention applied to major corporations and development projects for decades.

We hope you’ll join us for this important conversation.