Evolution of Business in Boston

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By Aaron Robinson

Businesses have changed immensely in Boston over time. Small local businesses that catered to city residents are now struggling to compete with well-known chains and high-tech businesses.

Today, new small businesses are finding it harder to get started.

Boston City Councilor Michelle Wu recently introduced a report that calls for more accommodations for small businesses to ensure their survival, called “Recommendations for Streamlining Boston’s Small Business Permitting and Licensing.”

Wu introduced the report earlier this month to Mayor Marty Walsh, because she knows what businesses face. As a business owner in Chicago, she said she had to deal with the struggle of trying to open a business.

“It was incredibly frustrating waiting for the city to give me the okay to open my business,” said Wu.

Today in Boston it can take up to 12 to 18 months for small businesses to open due to the current licensing and permitting system in Boston, according to Wu.

Wu said some hopeful small business owners become so discouraged because of the long licensing and permitting process that they give up on the business altogether.

Wu said that for businesses to survive, it will take more than a fairer licensing and permitting proposal.

“To get through the process [of starting a business] you need a lot of resources and support,” she said.As a city, Boston has seen developments in private businesses, however.

Samuel Tyler, president of the Boston Municipal Research Bureau, says that even though there are fewer traditional businesses in Boston, such as manufacturing, “That isn’t necessarily a bad thing.”

Now, businesses are becoming more technologically advanced, which helps increase Boston’s revenue.“About one third of our suggestions actually influence the city,” Tyler joked.

Although businesses are evolving, that doesn’t mean that there aren’t problems for the city. According to the Research Bureau, business property currently makes up 34.8 percent of the tax value, but pays 60.8 percent of the tax levy.

“Property revenue tax doesn’t apply to half the city. Half of the city is tax exempt,” Tyler said. The city needs more businesses to pay the taxes.

One of the things Boston is doing is increasing the amount of high-tech businesses in the city to help increase the revenue.

So far this year, Boston software businesses have drawn in $301 million compared to $213 million for biotech companies in Boston.

“The level of energy is higher than it’s been in a while in Boston,” said Michael Brown, a general partner at Battery Ventures, a capital firm.

However, businesses in the city will face challenges if there isn’t a qualified workforce in the form of graduating students. Tyler said that the city must provide adequate living conditions and transportation, citing the reported problems with off-campus student housing.

“The housing and transportation [problems] hurt businesses,” said Tyler.

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