Washington (PRESS RELEASE – May 3, 2011) – The Association for Enterprise Opportunity (AEO) released a timely and insightful study describing the state of U.S. microenterprises. The report, funded by the Citi Foundation and entitled “The Power of One in Three: Creating Opportunities for All Americans to Bounce Back,” frames the powerful role that the microenterprise sector can play in helping the American economy emerge into recovery and create jobs through small businesses. As suggested by the study’s title, the findings demonstrate that if one in three microenterprises hired just one employee, the U.S. economy would reach full employment.
The study was released at “Main Street Matters,” a conference held at the Omni Shoreham Hotel in Washington, D.C., to celebrate AEO’s 20th anniversary. Citi Community Development serves as the lead sponsor of this conference, which brings together thought leaders from the worlds of microfinance and Main Street to highlight the economic issues of the day and offer proposed solution.
“We recognize that if the economy is going to bounce back and we are fully to emerge into recovery, it must happen on Main Street,” says Connie Evans, President & CEO of AEO. “‘Micro’—or very small—businesses represent more than 80 percent of all businesses in the United States. Last year, more Americans became entrepreneurs than any time in the last 15 years. The paper we are releasing today shows the demonstrable impact those individual efforts can have on our economy, and we are delighted to promote its findings on the occasion of our 20th anniversary.”
Experts and thought leaders who spoke at the “Main Street Matters” conference included:
- Connie Evans, President & CEO of AEO
- Robert A. Annibale, Global Director, Citi Community Development & Microfinance
- Graham Macmillan, Program Officer, the Citi Foundation
- Janie Barerra, President & CEO, ACCION Texas-Louisiana
- Robert Boyle, Founder & CEO, Justine PETERSEN
- Dr. Gail Christopher, Vice President, Kellogg Foundation
“This report confirms our belief that small businesses, often served by microfinance and community development finance institutions, are important contributors to achieving greater economic growth and employment opportunities,” says Robert A. Annibale, Global Director, Citi Community Development & Microfinance. “Citi partnered to launch the $200 million Communities at Work Fund last year to provide capital to community development finance institutions, many of which are AEO members. Our work with AEO is indicative of Citi’s broader commitment to expand financial inclusion and increase economic empowerment.”
According to Evans, “AEO’s relationship with Citi is one that is longstanding and deep. In 2009 AEO was the recipient of a Citi Community Development investment to support membership outreach by expanding our internal communications and digital capacity. And Citi’s Steve Lafredo, Business Banking Director in the Commercial Banking Group, sits on our national board.”
Catalyzing the Results
The “One In Three” study also introduces AEO’s newly announced Catalyst Initiative, which was borne out of the organization’s 2010 CEO Forum. During that event microenterprise leaders determined that a more thorough assessment of the sector was needed to define the best path forward. The Catalyst Initiative seeks to combine research and data with resources that helps domestic microenterprise development organizations. This effort will provide a suite of programs and partnerships designed to bolster the potential of low- and moderate-income entrepreneurs by strengthening the capacity and reach of the nonprofits that serve them. The “One in Three” report—which examines financial health assessments of some 500+ organizations and incorporates feedback from over 100 practitioner interviews—can be considered Phase 1 of this project.
“The Power of One in Three” study, which argues that “focusing on Main Street businesses is a high-impact, less risky path than simply betting on the next new, VC-backed game-changing innovation,” is now available for download on the AEO website.
Among the report’s key findings:
- The median net worth of business owners is almost 2.5 times higher than non-business owners. For a black woman, the difference is more than 10 times; for a Latino man, the difference is 5 times.
- A $5K increase in revenues per microbusiness per year would generate more than $20B. That’s less than $500 in additional sales per month per business.
- Microbusinesses could connect to international trade routes. A 1% share of microbusiness imports to developing countries would be worth $37B USD.
“We saw the opportunity to help the entire sector better understand its current state in order to develop appropriate strategies for growth and investment, and are proud to have helped fund this landmark report,” says Graham Macmillan, Program Officer, the Citi Foundation. “The results of the ‘One In Three’ study provide a robust framework to better understand the domestic microenterprise landscape. We consider this work an important piece of our investment in our nation’s economic recovery.”
AEO, a national membership organization and voice of microenterprise development, creates opportunity for underserved entrepreneurs in the United States. For two decades, AEO and its 400 plus member organizations have helped more than two million entrepreneurs support themselves and their families and contribute to their communities through business ownership. AEO strives to foster greater awareness of the importance of strong and effective microenterprise initiatives to the U.S. economy, and to increase capacity of the field to support underserved entrepreneurs in starting, stabilizing and establishing businesses. AEO represents the public policy interests of its members and, through its growing network of partners, facilitates interactions among small entrepreneurs and the organizations that seek to help them succeed.