Do Small Businesses Help People Live Longer?

by QuickBooks

2 min read

Here’s a nice conversation-starter for your next cocktail party: Small-business owners help the people around them live healthier lives. It’s true.

A paper co-authored by professors at Louisiana State University and Baylor University makes a compelling case that communities with higher concentrations of locally owned small businesses have lower rates of mortality, obesity, and diabetes than those that rely heavily on big-box chains and other large businesses for their economic well-being.

The paper [PDF], which appears in the March issue of the Cambridge Journal of Regions, Economy and Society, culminates a study of more than 3,000 counties and parishes in the United States. “We proposed that the presence of a strong entrepreneurial culture, measured as the number of small businesses with zero to four employees, would be associated with healthier communities. We [found] support for this argument,” the researchers note.

The study clearly sides with small enterprises in a longstanding sociological debate. One side historically has thrown in with big business, arguing that their generally higher wages encourage economic development. The other side claims that small businesses have a greater stake in their communities (which leads to healthier workers and other benefits beyond income).

“Community health is not just the types of jobs that are located there, but also the structure of the business sector,” the researchers wrote. “A place with a greater proportion of small businesses will have a healthier population.”

In fact, the researchers found that the presence of big-box retail chains correlates with a higher age-adjusted mortality rate and a higher prevalence of obesity among adults. The paper doesn’t discredit the notion that bigger businesses can link to better health. Rather, it offers an alternative approach — and argues that policymakers and local leaders who strive to lure large companies to their area may not be pursuing the smartest long-term strategy. The approach is based on the concept of “collective efficacy,” a fancy phrase for “the capacity and willingness of community members to take responsibility for solving local problems.”

Collective efficacy meshes well with entrepreneurship because, among other reasons, it’s good for the bottom line. Business owners like making money, and they’re more able to do so when their communities prosper. “Entrepreneurial culture provides a local orientation that allows for greater levels of interaction and trust among community members,” the researchers wrote.

So why don’t more communities show the love for small businesses? It may be a matter of short-term dollars and cents: Good health and other benefits take longer to materialize, and they’re tougher to quantify in pure financial terms. “Small-business owners produce important noneconomic rewards for communities, such as enhanced stocks of social capital and collective efficacy,” the paper notes.

What about you? Do you make employee health — and your health — a priority? Tell us how in the Comments field below.

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