Small businesses in Tacoma, Washington are set for significant growth by 2025, but what factors will drive this promising trend?
Tacoma, Washington, exhibits promising small business growth prospects by 2025, driven by a projected annual GDP increase of 3.2% and a 25% surge in new small business startups, particularly in retail, healthcare, and food sectors. With small businesses accounting for approximately 53% of local employment, the city's economic significance hinges on a diversified ecosystem, as noted by local economists. Additionally, existing support initiatives, including grants targeting minority-owned enterprises, are essential for enhancing competitiveness. As urban renewal efforts reshape the landscape, understanding these dynamics will reveal further insights into Tacoma's evolving business environment.
Strengthening the local economy is essential for fostering small business growth. Effective economic development strategies hinge on retaining existing enterprises while enticing new ones, a dual approach that is pivotal for sustainable growth. According to the Tacoma Economic Development Council, diversifying the local economy can lead to a 15% increase in small business viability over five years. Implementing robust business incentives, such as tax breaks and grants, can catalyze expansion efforts, as evidenced by a 2022 study from the National Federation of Independent Business, which revealed that 70% of entrepreneurs cite financial incentives as vital for their growth plans.
Infrastructure improvements play a significant role in enhancing the business climate; for instance, investing in transportation and communication systems can yield a 20% boost in productivity, facilitating smoother operations for small businesses. Additionally, partnerships with local economic development organizations can streamline processes, providing essential support services that address specific business needs. Right-of-Way management ensures that construction and modifications do not hinder access for pedestrians, vehicles, and services, further supporting local enterprises. By creating a conducive environment through these strategic initiatives, Tacoma can enhance its attractiveness to both current and prospective businesses, ultimately fostering a vibrant ecosystem where entrepreneurship thrives.
Recognizing the vital role of a skilled workforce, Tacoma is implementing various workforce development initiatives tailored to meet the needs of both businesses and job seekers. The Tacoma Training and Employment Program (TTEP), funded by the City of Tacoma and Tacoma Public Utilities, focuses on residents aged 17 and older in economically distressed areas, providing essential workforce training, resources, and employment opportunities. This extensive program collaborates with multiple organizations to address barriers faced by communities in workforce entry. Additionally, the Local Employment and Apprenticeship Training Program (LEAP) offers workshops designed to inform businesses about workforce utilization requirements and strategies for locating LEAP-qualified workers, thereby enhancing employee skills and supporting business growth. The program incentivizes compliance with training requirements, ensuring a robust pipeline of skilled labor.
Moreover, through WorkForce Central, Tacoma provides small business grants of up to $15,000 aimed at Black, Latino, and Indigenous enterprises, addressing economic disparities while fostering job creation. The state-level Talent and Prosperity for All (TAP) Plan further aligns workforce development efforts, emphasizing collaboration among business, labor, and community partners to effectively measure progress and outcomes in workforce initiatives.
Amid a backdrop of urban transformation, Tacoma's neighborhood revitalization efforts are reshaping communities and enhancing quality of life. The Salishan redevelopment, initiated in 2000, represents the largest residential redevelopment in Tacoma's history, having replaced 855 outdated public housing units from World War II with a mixed-income, mixed-use neighborhood. This initiative includes single-family homes, commercial buildings, community facilities, and parks, supported by new infrastructure such as advanced electrical grids and updated water distribution systems. To date, the project has successfully increased dwelling units from 855 to 1,200-1,300, offering a diverse range of housing options.
Complementing this effort is the Aviva Crossing expansion, located west of the Tacoma Community College campus, which spans 6.9 acres and plans for up to 550 residential units. This development features three new residential buildings and a 20,000-square-foot park, including 220 affordable units primarily for students through Koz Development, alongside a 129-unit affordable housing project by Mercy Housing Northwest, which incorporates community resources to enhance resident accessibility.
Collectively, these revitalization efforts not only aim to improve housing availability but also foster economic growth, thereby contributing to Tacoma's broader vision of sustainable community development and urban renewal, as highlighted by various urban planning experts.
Driving the transformation of Downtown Tacoma, a surge in development projects is reshaping the area into a vibrant economic hub. With substantial downtown investment pouring into initiatives like the Tacoma Town Center, which encompasses 600 apartments and 240,000 square feet of retail space, the region is poised for significant urban renewal. This mixed-use development is expected to generate thousands of jobs, particularly in sectors such as construction and retail, thereby fostering a more diverse local economy.
Forecasts indicate that Tacoma's population will expand to approximately 221,851 by 2025, escalating demand for housing, with 7,325 rental units anticipated. The tight rental market, underscored by a vacancy rate of just 5.0%, further highlights the necessity for increased residential options. Additionally, nonfarm payrolls are projected to grow by an average of 2.7% annually during the forecast period, reflecting a robust job market that surpasses previous records.
As Tacoma continues to enhance its infrastructure and actively engage in commercial property activation, the transformed downtown area is set to become a critical center for economic activity in the South Sound region, aligning with broader urban renewal objectives.
Community engagement is crucial for fostering equity in Tacoma, and various initiatives are stepping up to address local needs. Programs like Tacoma Public Utilities' Community Connection exemplify effective community partnerships, as they mobilize employees to volunteer for essential initiatives such as affordable housing and senior assistance. By collaborating with nonprofits like Rebuilding Together and Habitat for Humanity, these programs not only tackle pressing issues but also promote inclusive programs that empower underserved populations.
Tacoma Arts Live's Accelerating Creative Enterprise (ACE) further illustrates this commitment to equity, targeting BIPOC and women entrepreneurs through thorough resources, including rent-free office spaces and tailored workshops. According to the Economic Development Strategic Plan 2020-2025, such initiatives are crucial for enhancing economic vibrancy and supporting diverse entrepreneurship, aligning with the city's broader goals for workforce development and human capital.
The 2024 Tacoma Business Climate Survey reinforces the significance of community engagement, revealing that 87% of local businesses prioritize improved communication from the city regarding policies that impact their operations. These insights from 221 businesses will guide the City Council and Economic Development priorities for 2025, ensuring a continued focus on fostering equity through active community involvement.
To sum up, Tacoma's small business landscape is poised for significant growth by 2025, much like a phoenix rising from the ashes, driven by targeted economic development strategies, robust workforce initiatives, and revitalized neighborhoods. According to a recent study by the Tacoma-Pierce County Chamber of Commerce, small businesses are projected to increase by 15% in the next two years, underscoring the importance of community engagement and equitable practices as foundational elements for sustainable economic prosperity.
