Small Biz Matters

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Small Business

Locate in the city or the suburbs?

March 2, 2011
KEYWORDS Small Business

When you decide where to locate your business, do you prefer hanging around other businesses like yours? If you do, a new study by the Federal Reserve Bank of Chicago and DePaul University may be of interest.

The survey of new census data from 11 cities across the country found thick concentrations of highly educated workers in central cities. Finance, the arts, health care, information, professionals, scientists, for instance. The suburbs were heavy on retail, construction, wholesaling and manufacturing jobs.

Indianapolis wasn’t among the 11 cities, but a Fed blog post about the study did praise us for growing during a decade when many Midwest cities stalled or lost population. Indianapolis grew 4.8 percent, which was slower than the 8.3-percent rate in the ’80s.

The blog reiterated the usual explanations for why white-collar workers cluster in cities—mostly to meet with each other and with clients. Likewise, most retailing and construction, wholesaling and retailing happen in the suburbs, so that’s where those businesses flock.

Would the same pattern have held in Indianapolis had we been included in the study? Here, lots of tech firms are in Hamilton County. So are lots of lawyers and financial types.

To the broader question, do you feel you need to be in a certain part of the Indianapolis area for your business to thrive? A hallmark of the area, a birthright almost, is quick access via a good interstate system. One can be just about anywhere within a half-hour unless it’s drive time.

Your thoughts?

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