Joel Burstein: Local business retention most underrated economic development strategy

When it comes to economic development, we all love the ribbon cuttings. Shovels in the ground, billion-dollar factories, gleaming new AI research hubs — they dominate the headlines and photo ops.

But the most transformative growth doesn’t always come from what’s new. It comes from what we choose to keep.

The businesses already rooted in our communities — especially minority-owned enterprises (MBEs) that have weathered decades of barriers — are among our most reliable engines for inclusive, sustainable growth. They hire our neighbors, pay local taxes and reinvest in our community. Yet too often, they’re treated as an afterthought in favor of chasing the next big win.

At BEAM Collaborative, we decided to flip that script. Over the past four years, we’ve worked to harness the purchasing power of some of the region’s largest institutions, intentionally directing more of it toward local and minority-owned enterprises. The results speak for themselves: In 2021, anchor institutions spent about $45 million. By 2025, that figure had climbed to more than $80 million — an infusion of $35 million into businesses that are here, employ here and will grow here.

If we want resilient, equitable economies, we can’t just celebrate the groundbreaking; we have to celebrate the staying power. Because sometimes the smartest investment is not in what we bring in, but in what we choose to build on. Retention doesn’t sound exciting. But it is transformative.

Across our region, thousands of small businesses, many owned by baby boomers and Gen Xers, are nearing retirement. Without a transition plan, they’ll disappear, taking decades of local investment, trust and jobs with them. Minority-owned enterprises are particularly at risk, given the historic barriers they’ve faced in accessing capital and contracts.

The benefits are undeniable. Helping a local HVAC firm continue after the owner retires ensures that skilled technicians remain on the job. When a minority-owned vendor wins a hospital or utility contract, we don’t just diversify supply chains, we boost household incomes. When institutions retain key local suppliers, they save money, reduce risk and strengthen community ties.

Yet business retention, especially for local and minority-owned enterprises, still lacks the attention and investment it deserves. Economic development often overlooks what’s right in front of us: small businesses rooted in place, employing neighbors, supporting schools and holding communities together. They’re not chasing an exit — they’re stabilizers, as vital as the headline-makers.

The 77% increase we facilitated proved that growth doesn’t always require something new. Sometimes the smartest move is investing in what already works, because with intentional support, those investments can outperform even the boldest forecasts.

It’s time for regional and state strategies to put business retention where it belongs — at the center of smart economic development. That means treating it as a core priority, not an afterthought. We need dedicated funding for succession programs, partnerships with local M&A advisors, incentives for institutions to choose local vendors, and sustained support for new owners taking the reins of legacy businesses.

Because when we protect what we’ve built, we create the foundation for what’s next.

It’s time to stop calling them “small” businesses and start calling them essential businesses.

Joel Burstein is co-founder and CEO of BEAM Collaborative.