How important are small businesses to the U.S. economy?

How important are small businesses to the U.S. economy?

Small firms:

  • Represent 99.7 percent of all employer firms.
  • Employ just over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.
  • Create more than half of the nonfarm private gross domestic product (GDP).
  • Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
  • Are 52 percent home-based and 2 percent franchises.
  • Made up 97.3 percent of all identified exporters and produced 30.2 percent of the known export value in FY 2007.
  • Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.

Sources (see the Office of Advocacy’s Research and Statistics page):

  • U.S. Dept. of Commerce, Bureau of the Census and International Trade Admin.
  • Advocacy-funded research by Kathryn Kobe, 2007
  • CHI Research, 2003
  • U.S. Dept. of Labor, Bureau of Labor Statistics.
1 Comment
  1. Suzanne says

    Many of my clients are small business owners. About 50% are hiring right now. This is unscientific but shows that there are employers who are hiring. Small businesses have always been an important part of this economic society!

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