RESOURCES

FACTS AND STATISTICS ON SMALL BUSINESSES AND ENTREPRENEURSHIP

Small businesses are a vital component of the United States economy, accounting for half of the nation’s real private non-farm gross domestic product (GDP) and employing half of the private sector workforce. Of the nearly 26 million businesses in the U.S., all but 17,000 are considered to be “small,” making these statistics all the more impressive. In fact, more than 89 percent of American employer firms have less than 20 employees. 

Many of you reading these points might scoff that these facts are mere trivia. Indeed, many college students hope to work for a large business someday. For many, that might seem ideal – a large firm can provide them with a number of opportunities that smaller ones might not. Yet, consider this. Small, entrepreneurial firms provide new vitality to our economy in the form of new businesses, innovations, and a “can-do” spirit. In any given year, for example, around 500,000 new firms are created and a similar number close. (In good economic times, more are created than close.) These new entities keep the U.S. economy dynamic and ensure that larger firms do not become too complacent. Most important, especially for politicians and economic developers, these new entrepreneurs provide new opportunities for job and economic growth. As a result, small businesses have accounted for 60 to 80 percent of the net employment growth in the United States over the past decade. Research has also shown that a state’s ability to influence new business creation is the most important thing that it can do to increase its overall economic success.

In a recent Junior Achievement poll, 70.9 percent of teenagers said they want to be their own boss someday. This speaks to the rising interest in entrepreneurship as a viable employment option for many Americans. The key to success, though, for any new endeavor is a quality education and a solid business plan.

Below are resources for those wishing to learn more about the importance of small businesses to the U.S. economy from the U.S. Small Business Administration’s Office of Advocacy.
 

General Information about Small Businesses and the U.S. economy:

• Frequently Asked Questions regarding small businesses

• Firm Size Data (from the U.S. Census Bureau’s Statistics of U.S. Businesses data set; note that these data have a three-year lag)

• Research Resources for faculty, students, and researchers of small businesses

Information regarding the economy as it pertains to small firms:

• The Small Business Economy: A Report to the President (prepared annually since 1982, previously called The State of Small Business: A Report of the President)

• Quarterly Indicators: The Economy and Small Business (prepared quarterly since 2004)

Demographic information on small business owners, including women, minorities, and veterans:

• Women in Business: A Demographic Review of Women’s Business Ownership (released August 2006)

• Minorities in Business: A Demographic Review of Minority Business Ownership (released April 2007)

• Research on veteran and service-disabled veteran small businesses

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