As they return home, military veterans will play a role in urban small business expansion
Small business ownership, a major source of economic growth, is more attractive to veterans
By: Maureen Casey, Director of Military and Veterans Affairs for JPMorgan Chase; Mark Rigdon, Director of Small Business Forward, JPMorgan Chase
As U.S. servicemembers have returned home after their years of military service, thousands of companies have hired these veterans and made them an integral part of the economy.
JPMorgan Chase & Co. helped found the 100,000 Jobs Mission to hire veterans across various industries. To date, the coalition of member companies has hired more than 190,000 veterans, and JPMorgan Chase alone has hired nearly 7,800 veterans. We also recently commissioned a report from the RAND Corporation that examines how companies large and small increase veteran employment opportunities by collaborating with each other and the government.
While we are proud of the work we've done to hire veterans, private sector hiring is only a small piece of how veterans are finding work once they come home. Millions of veterans across America are looking to small businesses for opportunities. A 2011 report from the Small Business Administration noted that veterans are 45 percent more likely to be self-employed than those without military experience.footnote 1 Interestingly, of that 45 percent, veterans with only a single enlistment were the most likely to own a business.
The leadership and entrepreneurship skills gained from their military service will help these men and women create and grow their own businesses. When we examined the research around veterans and small businesses we confirmed that veterans were more likely than average to own their own businesses and be their own bosses.
With more veterans likely to own businesses, they are becoming major players in the American economy. For example, more than 66,000 veteran-owned franchise businesses in the U.S. directly provide jobs for 815,000 Americans, and these businesses generate more than $41 billion in GDP.footnote 2 That is part of a national small business economy that is stronger than ever. According to the Small Business Administration, there are almost 30 million small businesses across the country. Even more impressive is the fact that, according to U.S. Census data, those businesses employ almost 50 percent of private-sector workers. And in the last two decades alone, small businesses have created more than 60 percent of the new jobs around America.
Theses staggering numbers do not tell the whole economic story. Now more than ever our economic growth – driven largely by small businesses – is concentrated in cities. Urban centers are more attractive to business owners and employees, and more people are flocking to them than ever. Numerous studies have confirmed that small businesses and entrepreneurship are major components of urban economic growth.footnote 3, footnote 4
Businesses like JPMorgan Chase are already hard at work promoting veteran-owned small businesses. For example, JPMorgan Chase – along with a select group of large corporations – has been recognized for our support of sourcing from these businesses. Businesses like Tricomm Services Corporation, which was started by US Navy veteran Joe Walsh and has provided IT support to our firm, deliver great work. Tricomm is one example of thousands of small businesses around the country that deliver high-quality services everyday. Given that metropolitan economies – with their large infrastructure needs and large populations – are huge consumers of small business goods and services, we should be encouraging more leaders in our major cities to focus on sourcing from the veteran-owned businesses that call them home.
In addition, through our support of organizations like the Institute for Veterans and Military Families (IVMF), we are also making a concerted effort to open doors to entrepreneurship for veterans, giving them a better understanding of what it takes to start their own successful business. For instance, in 2014 IVMF hosted its tenth Veteran Women Igniting the Spirit of Entrepreneurship conference in New York City, continuing to show their commitment to empowering entrepreneurial veterans in urban economies.
What does this emphasis on small business and cities mean for America's veterans? Veterans come home to diverse communities across America, including our largest cities. For example, according the Department of Veterans Affairs, more than 270,000 veterans will call the New York metropolitan area home this year. More than 220,000 live in San Diego, nearly 300,000 in Los Angeles. Nearly half of the veterans living in Colorado are in the Denver metro area.footnote 5 In fact, according to the VA, more than 70 percent of veterans live in urban areas.footnote 6 Many of them are also young, making it more likely that they will strike out on their and start their own businesses.
Given the critical role that small businesses play in our economy, the fact that veterans seem heavily pre-disposed towards entrepreneurship, and the reality that millions of veterans call our cities home –where much of the economic power of small businesses is derived –it is vital that policymakers and economic leaders continue to think about veterans as they develop similar programs to incentivize urban small business growth and expansion.
While we often consider strategies to expand small business growth, and companies employ hiring initiatives and small business strategies to spur development – like our Small Business Forward initiative – there is undoubtedly more we can do to help grow veteran-owned businesses and encourage more veterans to start their own business. We know from the research that veterans are often their own bosses, so as our men and women in service leave the military and come home to our cities, it is vital that we help them access our national small business economy.
- Factors Affecting Entrepreneurship among Veterans, SBA, March 2011
- Franchising Offers Successful Career Path for Veterans, Institute for Veterans and Military Families, March 28 2012
- The Missing Link: Clusters, Small Business Growth and Vibrant Urban Economies, Initiative for a Competitive Inner City, July 2014
- Does Local Firm Ownership Matter? Economic Development Quarterly, 2011
- Department of Veterans Affairs National Center for Veterans Analysis and Statistics, accessed 10/30/2014
- Characteristics of Rural Veterans: 2010, Data from the American Community Survey, Department of Veterans Affairs, July 2012