Small businesses across the United States are confronting multiple layers of unpredictability that range from economic swings and policy shifts to climate-related pressures and technological upheaval, according to a new report published by the Milken Institute in July 2026. The report argues that support organizations must overhaul their approach to help small businesses build what it calls "adaptive capacity"—the ability not just to survive but to flourish despite mounting uncertainty. Small businesses remain the engines of job creation and economic expansion in the country, and the broader economy faces serious risk if owners can't plan for or adjust to this new reality.
The report lays out a four-point agenda for business support organizations. First, it calls for access to better-quality, current data that tracks the wide-ranging trends affecting small businesses today, shared smoothly across institutions. Second, it urges lenders, government agencies, philanthropies, and advocacy groups to build strong, trusting networks before disruptions occur, enabling adaptive support during crises—a goal that will require deliberate financial and political backing for lasting partnerships. Third, the report highlights the need for flexible financial products that give small businesses breathing room during prolonged periods of deep uncertainty, pointing to community development financial institutions and other community-based lenders as workable examples. Fourth, it stresses that the smallest businesses—those with the most to gain from artificial intelligence—are the least likely to have adopted it, and recommends that every support organization weave AI integration and adoption into routine business interactions such as loan applications and coaching, rather than relying on standalone or ad hoc training programs.
The report finds that today's small businesses grapple with "multiple, compounding, and, at times, unprecedented sources of uncertainty." These include economic and policy volatility, climate-related chronic stressors and sudden shocks, and rapid technological disruptions. The authors argue that it's time for the ecosystem of support organizations to adjust to the modern conditions faced by the businesses they serve, stating that new models are essential to help small businesses build adaptive capacity.
Why does this matter? Small businesses are responsible for nearly half of all private-sector jobs and economic growth, and the report warns that the wider economy is at stake if these owners can't prepare for and respond to shifting conditions. The report's emphasis on AI adoption reflects a recognition that the smallest firms—often operating with tight margins and limited staff—stand to benefit most from automation and efficiency tools, yet face the steepest barriers to implementation. By embedding AI support into everyday interactions with lenders and advisors, rather than treating it as a separate training initiative, support organizations can make adoption more seamless and less intimidating. Meanwhile, flexible financing addresses a reality that traditional credit products weren't designed for: extended periods when revenue is unpredictable and planning horizons are short. Community development financial institutions have already pioneered products with more forgiving terms, and the report suggests scaling these models across the sector. The call for shared data and stronger networks reflects a belief that fragmented, reactive support leaves businesses exposed, while coordinated, proactive partnerships can cushion shocks and speed recovery.