Brad Watts, CHSR Research Scientist, to be published in the Oxford Handbook of Local Competitiveness.
We describe the University at Albany’s innovative $2.5 million Small Enterprise Economic Development (SEED) Program, a joint initiative sponsored by the School of Social Welfare and the School of Business, the Small Business Development Center (based in the School of Business), a large statewide credit union, New York’s Empire State Development Corporation, and numerous businesses and non-profit organizations. The program provides character-based micro-loans to low income entrepreneurs in NY State’s Capital Region, supported by mentoring and guidance from local executives and graduate students. We consider the opportunities and challenges of implementing such a program, based on the results of a pilot study. Although relatively new, SEED has generated some promising results relating to regional economic development. In just two years, SEED has invested $1.2Mil in 37 new businesses and created or saved 150 jobs, at a cost of only $1,000 per job. SEED may be a useful model for universities seeking to: (1) extend credit to worthy entrepreneurs who are underserved by traditional funding sources; (2) enhance local competitiveness by stimulating economic development in inner city neighborhoods . Unlike conventional economic development initiatives, which are typically targeted to high-tech firms, SEED is targeted to the “bottom of the pyramid” (Prahalad, 2005). This unique program, which leverages the resources of the university and its stakeholders, can be adopted by other universities seeking to promote regional economic and social development.
Miesing, P., Watts, B., Siegel, D., & Briar-Lawson, K. In press. Lessons on microenterprise development from a university-based microlending development program. In Audretsch, D.B., Link, A.N., & Walshok, M. (eds.) Oxford Handbook of Local Competitiveness. Oxford, UK: Oxford University Press.