1/27 Policies Promoting Microenterprises in Colonias: What Works? What Does Not Work? And Why? by Cecilia Giusti, Ph.D 1 I. Research Question The Small Business Administration Office reports that small businesses in the U.S. represent more than 99 percent of all employers, employ 51 percent of private-sector workers, and represent nearly all of the self-employed. 2 The same pattern is seen for small businesses in Texas (SBA, 2003). Small businesses are widely recognized as a valuable foundation for fostering economic growth. Of those who are self-employed — representing 7 percent of the work force — 53 percent have home-based businesses and 3 percent own franchises (SBA, 2003). Additionally, women-owned businesses constitute a highly dynamic sector within this trend. The Organization for Economic Co-operation and Development estimates that women entrepreneurs in the U.S. increased from 29.7 percent in 1980 to 35.2 percent in 1990 (OECD, 2000), 3 and the U.S. Economic Census reports that women-owned businesses increased 16 percent in the 1992–97 period. 4 Several attempts have been made to promote the development of small businesses, both to inject dynamism in the economy and to improve living standards, as self-employment is seen as one route out of poverty. At the federal, state, and local levels, policies are being designed to reach and support potential businesspeople to become financially independent. This paper discusses our present knowledge of how effectively these policies promote microbusinesses in colonias (defined in section II.1) on 1 Dr. Giusti is a Visiting Professor at the Landscape Architecture and Urban Planning Department and a Research Associate at the Center for Housing and Urban Development at the School of Architecture at Texas A&M University. 2 SBA defines small business as “independent business with less than 500 workers.” 3 The Organization of Economic Co-operation and Development (OECD) defines entrepreneurs as workers who declare their professional status to be that of employers or own-account workers. 4 Women-owned businesses are defined as privately held firms in which women own 51percent or more of the enterprise.