Supporting Small Businesses – Arkansas House of Representatives

The Role of Small and Medium-Sized Enterprises in Advancing Sustainable Development Goals in Arkansas

Introduction: Aligning Local Commerce with Global Goals

The strategic support of local small and medium-sized enterprises (SMEs) represents a significant opportunity to advance the United Nations Sustainable Development Goals (SDGs) within the state of Arkansas. As the holiday consumption period approaches, consumer spending patterns can be leveraged to reinforce local economic structures, contributing directly to goals related to economic growth, community sustainability, and innovation. Arkansas’s recognition as the 3rd best state for starting a small business underscores its potential as a fertile ground for sustainable and inclusive economic development.

Economic Impact and Alignment with SDG 8: Decent Work and Economic Growth

SMEs are the cornerstone of the Arkansas economy, playing a critical role in achieving the objectives outlined in SDG 8, which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

Employment and Economic Contribution

• SMEs constitute 99.3% of all businesses within Arkansas, totaling over 280,000 individual enterprises.
• This sector is responsible for the employment of 47.5% of the state’s workforce, highlighting its fundamental role in job creation and poverty reduction.
• Nationally, SMEs are credited with generating two-thirds of net new jobs, serving as a primary engine for economic dynamism and opportunity.

Local Economic Reinvestment and Community Resilience

Supporting local businesses directly contributes to the financial health and sustainability of communities. Analysis indicates that for every dollar spent at a local SME, approximately 68 cents remain within the local economy. This reinvestment strengthens the local economic base, supporting public services and fostering a cycle of sustainable growth in line with SDG 8 and SDG 11 (Sustainable Cities and Communities).

Fostering Innovation and Sustainable Communities (SDG 9 & SDG 11)

The SME sector is a critical driver of innovation and community development, aligning with SDG 9 (Industry, Innovation, and Infrastructure) and SDG 11 (Sustainable Cities and Communities).

Driving Innovation and Competition

Local enterprises foster a competitive market that benefits consumers and drives innovation. By offering unique products, often sourced from local artisans and producers, they promote responsible consumption patterns (SDG 12) and preserve local craftsmanship and cultural heritage. This diversity strengthens the resilience of the local economy and contributes to a vibrant, innovative business ecosystem.

Strengthening Community Identity

Local retailers and businesses are integral to the character and resilience of communities. Investing in these enterprises is a direct investment in the social and economic fabric of the neighborhood, ensuring that communities remain vibrant and economically self-sufficient, a core tenet of SDG 11.

Legislative Framework for a Sustainable Business Environment

The Arkansas General Assembly has implemented policies aimed at creating an enabling environment for SMEs, which supports the achievement of multiple SDGs. These measures are designed to ensure long-term success and sustainability for entrepreneurs.

Key Legislative Actions

1. Tax Burden Reduction: Measures have been passed to lower the tax obligations for small businesses, increasing their financial viability and capacity for growth.
2. Regulatory Streamlining: Licensing and regulatory requirements have been simplified to reduce administrative barriers for entrepreneurs.
3. Financial Access: Grant and loan opportunities have been expanded to provide necessary capital for start-ups and existing SMEs.
4. Workforce Development: Investments in training programs help businesses attract and retain skilled labor, contributing to SDG 8 by promoting decent work and a skilled workforce.

Conclusion: Consumer Action as a Catalyst for Sustainable Development

Consumer purchasing decisions, particularly during high-volume retail periods, are a powerful tool for promoting sustainable development. By choosing to support local SMEs, consumers in Arkansas can directly contribute to a more resilient, inclusive, and prosperous state economy. This conscious consumerism strengthens local communities and advances key Sustainable Development Goals, ensuring that economic activity delivers broad-based benefits throughout the year.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 8: Decent Work and Economic Growth
   • The article heavily focuses on the economic impact of small businesses in Arkansas. It highlights their role in job creation (“Nearly half of the state’s workforce — 47.5% — is employed by small businesses”), their contribution to the state’s economy (“more than 280,000 small businesses representing 99.3% of all Arkansas businesses”), and the direct economic benefit to communities (“68 cents of every dollar spent at a small business stays in the local economy”). This directly aligns with SDG 8’s goal of promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.
2. SDG 9: Industry, Innovation, and Infrastructure
   • The article points to Arkansas as a place where “entrepreneurs can thrive, innovate, and build stronger communities.” It also notes that small businesses “drive the kind of innovation and competition that ultimately benefits consumers.” This connects to SDG 9’s aim to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. The support for entrepreneurs and the recognition of their role in driving innovation are central to this goal.
3. SDG 11: Sustainable Cities and Communities
   • A core theme of the article is the link between supporting local businesses and community well-being. Phrases like “build stronger communities,” “strengthening the economic health of your own community,” and “helping keep our communities strong” directly address the goal of making cities and human settlements inclusive, safe, resilient, and sustainable. The reinvestment of money into the local economy supports local services and strengthens community resilience.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.3: “Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises…” The article explicitly details such policies enacted by the Arkansas General Assembly, including measures to “reduce tax burdens on small businesses, streamlined certain licensing and regulatory requirements, expanded grant and loan opportunities for entrepreneurs, and invested in workforce development programs.”
2. Under SDG 9 (Industry, Innovation, and Infrastructure):
   • Target 9.3: “Increase the access of small-scale industrial and other enterprises… to financial services, including affordable credit, and their integration into value chains and markets.” The article’s mention that lawmakers have “expanded grant and loan opportunities for entrepreneurs” is a direct example of an action aimed at achieving this target by improving financial access for small businesses.
3. Under SDG 11 (Sustainable Cities and Communities):
   • Target 11.a: “Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning.” The article’s emphasis on shopping local to ensure that money “stays in the local economy” to “support local services, and boost overall economic well-being” is a practical application of strengthening local economic links and development, which is the essence of this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 8:
   • Number and Percentage of Small Businesses: The article states there are “more than 280,000 small businesses representing 99.3% of all Arkansas businesses.” This serves as a direct indicator of the prevalence and growth of small enterprises, relevant to Target 8.3.
   • Employment Rate in Small Businesses: The statistic that “47.5% — is employed by small businesses” is a clear indicator for measuring job creation and the contribution of this sector to overall employment.
   • Job Creation Rate: The statement that small businesses “fuel two-thirds of net new jobs nationwide” is an indicator of their role in creating productive employment.
2. Indicators for SDG 9:
   • Access to Financial Services: While not providing a specific number, the mention of “expanded grant and loan opportunities” implies an increase in financial resources available to entrepreneurs, which can be measured to track progress towards Target 9.3. The number of loans/grants disbursed would be a specific indicator.
3. Indicators for SDG 11:
   • Local Economic Reinvestment: The statistic that “68 cents of every dollar spent at a small business stays in the local economy” is a direct quantitative indicator that measures the strength of local economic links and the effectiveness of supporting local businesses, as per Target 11.a.

4. Summary Table of SDGs, Targets, and Indicators

Source: arkansashouse.org