A study released last year revealed a troubling reality: despite strong evidence that internships and work-based learning combat underemployment and help prepare learners for good jobs, most college students still lack access to these essential opportunities. The study found that less than half of the 8.2 million learners who wanted to intern in college in 2023 were able to do so. 

It’s not just learners who are frustrated with a supply problem. Even as job growth slows, the United States has 8 million job openings, demonstrating a persistent talent shortage. About 40% of employers report they believe graduates are unprepared to enter the workforce. The answer to both of these challenges may come from the same, unexpected and untapped resource: small businesses. 

Many students and colleges turn to large and established employers with existing internships and co-ops as the primary source for work-based learning opportunities. But while the job openings and hiring needs of Fortune 500 and other large companies are more likely to draw attention, the majority of recent job growth comes through small businesses.

These businesses are, after all, the backbone of the economy. They generated nearly two-thirds of net new private-sector jobs over the last 25 years. In fact, some of the most dynamic job creation happens at the local level, spearheaded by small businesses. 

And yet these critical drivers of local economies remain largely forgotten partners for higher education. It’s past time that institutions thought of small businesses as pivotal partners in creating employment pathways for students. 

Small businesses currently face substantial barriers to hosting interns. One recent study found that nearly half of employers cite operational challenges – such as recruitment, supervision, and aligning internships with business goals – as obstacles to offering internships. Another 18% say they struggle with designing programs that comply with labor laws and academic credit requirements.

Colleges and universities can play a crucial role in overcoming these hurdles by designing adaptable internship frameworks tailored to the needs of small businesses. This includes developing standardized programs with clear guidelines, training for supervisors, and providing ongoing support to both students and employers.

Colleges could also collaborate with local businesses to create shorter-term, work-based learning projects, which offer students career-relevant experiences without requiring the same level of time and resources as full internships.

Colorado Community College System’s Impact Projects program, for example, provides learners in the system’s Rapid IT Training and Employment Initiative with the opportunity to engage in project-based internships designed by local employers.

Through the program, Denver-area businesses post real-world technology projects in data analytics or IT support, which are then tackled by teams of up to 5 students over 40 hours. Of employers who have participated in the program, 100% report experiencing improved hiring outcomes, stronger employee retention, and reduced workflow pressures. 

This approach addresses one of the most significant barriers small businesses face: the cost. Even with thoughtfully designed programs, small businesses often lack the resources to supervise and compensate interns. Larger corporations, too, could step in to fill this gap.

By sponsoring internship programs for small businesses, corporations not only strengthen communities but also build a robust, long-term talent pipeline for themselves. With corporate support, small businesses can provide the “last mile” of training that so many companies say today’s college graduates lack—ensuring new talent enters the workforce equipped with real-world, job-ready skills.

Supporting small businesses is also essential for fostering innovation. Their agility and flexibility allow them to develop creative solutions that larger corporations may struggle to achieve. Recognizing this, big companies look to small businesses as predictors of market trends – sometimes even acquiring them to harness their ingenuity and maintain a competitive edge. 

This dynamic has led corporations to already make significant investments in small businesses. JP Morgan’s Small Business Forward initiative, for example, committed $75 million over five years to support women-, minority-, and veteran-owned small businesses with access to capital, technical support, and expert guidance.

Similarly, Goldman Sachs’ 10,000 Small Businesses initiative provides education, capital, and support services to entrepreneurs across the country. Imagine such an initiative explicitly dedicated to funding internship programs. 

Better yet, envision corporations and colleges partnering to design and launch those efforts. The University of Tennessee at Chattanooga College of Engineering and Computer Science (CECS), for instance, has partnered with Truist to fund paid student internships at small businesses that lack the financial means to host them. This program focuses particularly on opportunities for women and minority students, requiring participating businesses to be within 40 miles of campus. 

By tapping into the potential of small businesses, higher education can create a more inclusive and resilient workforce pipeline. Students gain access to opportunities that prepare them for the real world. Small businesses receive the talent and support they need to thrive. And corporations benefit from a stronger, better-prepared workforce.

The solution to both the country’s internship supply problem and its talent shortage is right in front of us. It only requires shifting our focus from Wall Street to Main Street – to the small businesses that drive local economies. 

By thinking small, we can tackle one of the largest challenges facing our economy. 

Dana Stephenson is the co-founder and CEO of Riipen