COVID-19 and Entrepreneurial Firms: Seeding an Inclusive and Equitable Recovery

Darrene Hackler, PhD, Smart Incentives
Ellen Harpel, PhD, Smart Incentives
Jessica Looze, PhD, Kauffman Foundation
Jessica Milli, PhD, consultant, Kauffman Foundation

In the spring of 2020, as the COVID-19 pandemic began to unfold and it became clear that the emerging public health threat was also a threat to businesses and the economy, policymakers responded by providing emergency funding aimed at keeping businesses and the economy afloat.

In this report, we examine these federal, state, and local recovery funds and the extent to which various programs address the inequities experienced by small and new firms – particularly businesses owned by Black, Indigenous, or People of Color (BIPOC), businesses owned by women, and businesses owned by individuals in historically under-resourced communities. We highlight some of the more inclusive and equitable programs that have been developing in some states and local governments as part of this recovery.

Although data on impact and reach is still limited, we discuss the information available about outcomes of these relief and recovery programs and provide insights about how to support entrepreneurs.

Key insights to inform more equitable design of future relief and recovery policies

Following a review of existing federal, state, and local programs aimed at assisting small and new businesses struggling in the midst of COVID-19, we offer three key insights. These insights may help inform more equitable design of future relief and recovery policies and programs for small and new businesses. These insights include:

• Programmatic equity and inclusion goals can complement economic growth objectives. Including entrepreneurs and small business owners from diverse backgrounds in the development of such programs can improve their design.
• Program designers need more guidance from federal and state government on the development of reporting metrics.
• The tracking of equity and inclusion metrics should be paired with purposeful program design and feedback loops.