Alabama Small Business Development Center has big impact
The Alabama Small Business Development Center (SBDC) Network was recognized recently for its role in helping thousands of small businesses in Alabama, as part of national “SBDC Day” to share the impact SBDCs have in communities across the country. The Alabama program is an accredited member of America’s SBDC, the largest and most comprehensive business assistance network in the U.S. “Alabama fosters an environment that allows small business enterprises to put down roots and thrive,” said Greg Canfield, secretary of the Alabama Department of Commerce. “The Alabama SBDC Network leverages resources from Alabama’s higher education institutions and is a vital part of the state of Alabama’s support system to help small firms succeed. “Their programs for capital access, government contracting and international trade are important for small business growth and help sustain the state’s entrepreneurial culture.” Small business is a vital component of the Alabama economy. Approximately 97 percent of the state’s businesses are considered small, with fewer than 500 employees. More than 300,000 small businesses provide more than 765,000 jobs, representing almost half of the state’s workforce. Fostering growth Growing and sustaining the small business sector is a key component of the Alabama Department of Commerce’s Accelerate Alabama 2.0 strategic plan. Working in partnership with Commerce, the Alabama SBDC Network plays an important role in accomplishing the plan’s goal for fostering entrepreneurship and innovation. The Alabama SBDC provides confidential, no-cost technical assistance and is a proven resource for aspiring and emerging small business owners. Over the last five years, the SBDC assisted 10,710 small firms in Alabama and helped 987 new business startups. It facilitated access to $379.6 million in capital for small business expansion projects. Among the Alabama companies the SBDC has assisted are Creative Concepts, a candy maker; Motus Motorcycles, whose handcrafted bikes have smashed speed records; and Sun Charge Systems, which produces solar-powered benches that act as charging stations. In addition, clients of the SBDC’s Procurement Technical Assistance Center (PTAC) program reported winning $1.45 billion in government contracts during the five-year period. These efforts created and retained 4,359 jobs. Figures are supported by client attribution and are not projections or estimates. SBDC customers have experienced 12.9 percent sales growth vs. the national average of 3.4 percent and employment growth of 8.5 percent vs. the national average of 1.9 percent. The program also helps new business spinoffs from university and industry research. A majority of the participants in Alabama Launchpad and other pitch competitions receive help from the SBDC. As economic developers look at ways to help local existing industry, the Alabama SBDC Network is a viable resource with 10 offices and 25 professional business advisers. Many advisers are co-located with incubators and local economic development organizations and travel to meet business owners in all 67 counties. The program is hosted by the University of Alabama and participating institutions include Alabama State University, Auburn University, Jacksonville State University, Troy University, University of Alabama in Huntsville, University of North Alabama, University of South Alabama and the University of West Alabama. The SBDC is a partnership program with the Small Business Administration, the state of Alabama and higher education institutions. For more information on small business assistance, please contact Eddie Postell in the Small Business Division of the Alabama Department of Commerce and visit the SBDC website. This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website. Republished with permission of Alabama NewsCenter.
Daniel Sutter: Will public universities privatize?
Many government services have been privatized over the past forty years, from whole enterprises like British Airways to simply contracting with private businesses for services like trash collection and operating cafeterias. My corner of the world, public universities, has witnessed only service privatization, but this may change. And in contrast with cases where conservative politicians have driven privatization, I suspect that a public university will decide to go private. Declining state appropriations for higher education represents the driving factor here. Speculation by higher education observers centers on three leading state universities, Michigan, Virginia, and Colorado, which currently receive 10% or less of their operating budgets from state appropriations. (To be clear, none of these universities have privatization plans today.) A university receiving 10% of its budget from the state would only have to cut costs by 5% and increase other revenues by 5% one time to take state funding to zero. I suspect that administrators can imagine how they might make such cuts and revenue increases. State appropriations to higher education have been falling as a share of government spending and university budgets for 50 years. For instance, the University of Michigan received 80% of its budget from the state in the 1950s. State appropriations fell from 46% to 36% of public university budgets nationally between 1977 and 1996. Appropriations have declined another 16% nationally since 2008 (25% here in Alabama), according to data from Illinois State University. State appropriations now provide less than 20% of the budgets of Troy University and the University of Alabama. Universities remain under state control despite diminishing financial support. For example, Governor Scott Walker and state legislators cut appropriations to the University of Wisconsin by $250 million this year, but also froze university tuition and revoked state law protection for faculty tenure. Eventually administrators and faculty at some state university will decide that state funding is not worth the control, and elected officials will jump at the chance to cut the remaining spending. Reduced state support has coincided with a rapid increase in tuition. Net tuition (posted tuition minus university scholarships and financial aid) at public universities has increased 54% faster than inflation over the past twenty years. State appropriations cannot be blamed for all of this, since net tuition has increased 29% faster than inflation at private universities. The relative quality of flagship state universities has also declined. Fifty years ago, Michigan, Virginia and Wisconsin, along with the Universities of California at Berkeley, Minnesota, Illinois, and North Carolina were among the nation’s top twenty universities. Only one public university made the U. S. News and World Report top twenty in 2014. Federal student aid and Medicaid have dramatically shaped state budgeting since 1965. Medicaid operates under a matching grant formula, under which states receive between $1 and $3 from the Federal government for every $1 they spend on Medicaid. But if states reduce spending on higher education and let tuition rise, many students will receive more Federal aid for students. Lawmakers can bring more federal dollars to their states by shifting appropriations from higher education to Medicaid. Over the last fifty years, Washington has asserted increasing control over state universities. Eligibility for Federal student aid requires compliance with U.S. Department of Education regulations and maintenance of regional accreditation. Any new tax dollars for higher education seem likely to come from Washington as well. President Obama’s free community college plan would rely on Federal dollars. Federal control, I think, is bad for higher education. Competition is the greatest force for ensuring performance, and state-run universities will naturally compete. North Dakota has increased higher education appropriations by 26% since 2008, using oil revenues to gain a competitive edge for the state’s universities. State control allows for experimentation and diversity, which is particularly valuable in scholarly fields. Our state universities have provided millions of people access to a quality education at an affordable price. But state lawmakers providing less funding while insisting on as much control as ever seems unsustainable. Our public universities appear destined to become “state” in name only. Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.
