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To focus its business assistance marketing efforts in this way. the City should consider targeting business sectors that have large proportions of employment in relatively small firms. This is because small firms often do not have the internal resources necessary to expand successfully. Furthermore. small firms usually lack an awareness of the resources that are available to help them grow successfully. Appendix A explains a methodoloe\ used to filter through the local business sectors using the shiftshare analvsis conducted in the Baseline Study and identify sectors with proportionately large amounts of employment in relatively small firms. While Appendix A identifies a number of sectors within which the City might target its marketing efforts for business expansion programs. this is only one suggestion among many possible methods of targeting business expansion efforts. An alternative method to focus business expansion efforts would be to identify a very limited number of sectors that have particularly good prospects for growth (again. based on additional study of the dynamics affecting local growth in specific sectors) and fine-tuning a package of assistance programs specifically to address the sectors unique needs. Following is a series of recommended program actions to address general citywide business retention and expansion needs. Depending on the findings from more in-depth study of individual business sectors. the City may ultimately find it useful to refine or augment these programs. or to target certain programs to specific business sectors. Action 1.1: Develop Mechanisms to Encourage Formation of Business Relationships Between Local Companies The development of business relationships among local businesses should be encourased as a means of maximizing the "multiplier' effect of local economic activity. Almost all businesses purchase goods and services from various suppliers (backward linkages). and almost all sell products and services to other users (forward linkages). Encouraging local companies to form backwards linkages with local suppliers is a way to maximize the indirect benefits of local economic activin_ . For example. while a local producer might employ several dozen employees. the firm could be indirectly responsible for stimulating employment growth at local companies that supply goods and services. The Cin can take steps to encourage or facilitate the development of linkages between local businesses. One means to encourage linkages would be to provide an incentive to local businesses that purchase goods or services from local suppliers. For example. the City could consider the possibility of providing a rebate on the gross receipts -based business license fee to companies that increase purchasing from local suppliers. This could be implemented in a manner that would render it neutral from a business license tax revenue stand -point. because the Cin would collect increased revenues from those suppliers who benefit from the linkage. to offset the rebate offered to the producers. The