SBA Office of Advocacy New Research Publications

Each year the Small Business Administration’s Office of Advocacy documents the importance of entrepreneurship to the American economy, and highlights policy issues of significance to small firms.

The Library just received the Office of Advocacy’s Research Publications 2007 (published January 2008). This is a list of 34 reports on small business topics including banking, general small business and entrepreneurship, human capital and employment benefits, innovation and technology, owner demographics, procurement, regional economic development, and regulations and taxes.

Included in the list of publications is a report entitled, Small Business and State Growth: An Econometric Investigation (http://www.sba.gov/advo/research/rs292tot.pdf). This report found that small business start-up is one of the most important factors in determining gross state product, state personal income, and total state employment: “…our results indicate that the most fruitful policy option available to state governments is to establish and maintain a fertile environment for new establishment formation.”

Several other studies examine regional economic development issues. Friends or Foes: The Spatial Dynamic between Established Firms and Entrants (http://www.sba.gov/advo/research/rs293tot.pdf) shows that state and municipal economic development agencies are increasingly designing policies to nurture and support home-grown businesses to achieve their growth objectives. This study explores the impact on established firms of new local entrants. Conclusion? By the third year after entry, the effect on the financial performance of existing firms is positive. In the short term, entrants are foes and in the long term, entrants are friends.

In the SBA Office of Advocacy’s annual report, The Small Business Economy: A Report to the President for Data Year 2006 (2007 edition) (http://www.sba.gov/advo/research/sb_econ2007.pdf), there is a chapter on social entrepreneurship focusing on a new breed of entrepreneurs developing solutions to social problems, and a chapter on characteristics of veteran business owners and veteran-owned businesses. Both of these chapters are worth reading if you’re a policy-maker; in the Library, I’m getting more questions from veterans opening businesses and entrepreneurs wanting to start nonprofits to solve various local social issues.

Frequently Asked Questions is a 2-page summary of other research material and provides a series of quick, easy-to-recite facts for an external audience to recognize the importance of small business to the economy. You can find this at http://www.sba.gov/advo/stats/sbfaq.pdf.
I keep a copy at my desk and at the Reference Desk.

SBA Office of Advocacy Research Publications 2007 is available in the Library’s Business Reference section at Main. You can also access the reports online at www.sba.gov/advo.

Authenticity and Consumers

We have two new books in the library on authenticity in advertising. The first, Authenticity: What Consumers Really Want by James H. Gilmore and B. Joseph Pine II (Harvard Business School Press, 2007), shows how successful enterprises identify themselves with their customers' self-images and desires. The book provides practical management tools to help businesses assess their perceived authenticity, develop new approaches for appealing to the "real," and implement specific strategies to render authenticity. A second new book on authenticity is by social media specialist, Rohit Bhargava. *Personality Not Included: Why Companies Lose their Authenticity and How Great Brands Get it Back (McGraw Hill, 2007) is also based on the premise that the age of the faceless corporation is over. The new business era is one where great brands and products must evoke a dynamic personality in order to attract passionate customers. To be successful today, businesses must redefine themselves in the customers' universe.

This week, I also received an Harvard Business School Working Knowledge email, "Authenticity Over Exaggeration: The New Rule in Advertising." According to John Deighton, consumers are using the Internet to blunt traditional commercial messages, and it's time for companies to rethink their marketing strategy. For example, successful advertising campaigns today are self-parodying , and spark discussions rather than blatantly sell products. Deighton cites Dove's "Real Beauty" campaign, a multiphase effort with an underlying theme that subverts traditional beauty product messages of aspiration and perfection. In one ad, full-sized regular-looking women are used. In another, young girls reveal insecurities about their looks, showing the harm done by unrealistic standards set by the industry. In these cases, the ideas belonged to the consumer you're trying to engage; get them talking by presenting a topic they want to discuss. Deighton notes, "When a brand adopts a point of view, rather than simply making a claim for softer skin, for instance, it can become a lightning rod for discourse." However, you do have to be confident that your message can withstand Internet threads of re-interpretation. John Deighton is the Harold M. Brierley Professor of Business Administration at Harvard Business School. His working paper, "Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers," will be published in the Journal of Interactive Marketing.

In a nutshell, authenticity has to do with the consumer using technology to learn about the marketers, rather than the other way around. Consumers today use sites such as eBay, YouTube and Facebook to gather information and share opinions on how they spend their money. The marketer no longer controls the message.