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Game-changing analysis puts spotlight on Rochester’s small businesses

December 2, 2020

“Rochester is actually a community of small businesses in the shadow of the Mayo.”

— Kathleen Harrington

Business district in Rochester, MN

Any town would count itself lucky to be the home of the internationally renowned Mayo Clinic. But Rochester has found an additional reason to be proud of its economy — its critical small business sector.

Aiming for economic diversity

When Kathleen Harrington became executive director of the Rochester Area Chamber of Commerce, she was aware of concerns about diversifying a local economy that is at risk of becoming Mayo’s “company town.” “I kept asking, diversify from what?” Harrington says. “What is our full picture — what is our current economic landscape?”

Harrington asked the Extension team of Brigid Tuck and Jennifer Hawkins for baseline data on the economy of Rochester and Olmsted County. The report focused especially on the economic impact of small businesses on the town’s employment and revenue.

The power of “one in three”

The team’s findings were both informative and surprising. One of every three local jobs in the area comes from small businesses. “This put a bright light on the importance of small business,” says Harrington. In fact, an estimated 39 percent of the sector’s 95,917 jobs are at businesses with fewer than 100 employees. An estimated 50 percent are at businesses with fewer than 250 employees.

Extension's analysis was instrumental in assisting the Chamber in its strategic planning and defining its primary stakeholder. “Rochester is actually a community of small businesses in the shadow of the Mayo,” says Harrington. New Chamber programs were designed to assist small businesses in their competitiveness in the new marketplace.”

Changing the focus to small business

Harrington credits Extension’s work with changes in the community that happened just months after the study was completed.

  • The Chamber changed its mission from leadership and advocacy to service to small businesses, recognizing their importance and critical needs.
  • The Chamber added a yearly series of educational opportunities that are free, and efficiently accessed by resource-strapped small businesses. The series is offered to both non-members and members, to give all small businesses a better chance for success. “Our goal is to enhance the success of the small businesses both individually and collectively,” says Harrington. “Our mission is to promote business success which, in turn, supports a thriving community.”
  • “One in three jobs” became the Chamber’s mobilizing mantra and advocacy statement. Harrington started a public campaign to spread the news to local media, the general public, and policymakers who frequently make decisions. Months into the campaign, she heard from a county commissioner: “We have to be aware of the impact of our decisions on small businesses.”

Given the game-changing nature of this economic impact analysis, Harrington enthusiastically endorses Extension’s work in helping communities think about the future. Economic impact analysis helps communities understand how local economies work. Learn more by contacting a community economics educator in your area or Brigid Tuck, Extension economic impact analyst.

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