Small Business Drives The U.S. Economy
Provides Jobs For Over Half Of The Nation’s Private Workforce
Small business drives the U.S. economy by providing jobs for over half of the private workforce. Moreover, the latest figures show that small business with fewer than 20 employees increased employment by 853,074 during 2001-2002.
These and other statistics outlining small business’ contribution to the economy are contained in the Small Business Profiles for the States and Territories, 2005 Edition issued recently by the Office of Advocacy of the U.S. Small Business Administration (SBA).
“Small business drives the American economy,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “Main Street provides the jobs and spurs our economic growth. American entrepreneurs are creative and productive, and these numbers prove it.”
Small businesses are job creators. Office of Advocacy funded data and research shows that small businesses represent 99.7 percent of all firms, they create more than half of the private non-farm gross domestic product, and they create 60 to 80 percent of the net new jobs.
In 2004, there were an estimated 23,974,500 businesses in the U.S. Of the 5,683,700 firms with employees, 5,666,600 were small firms (fewer than 500 employees). The latest data also show that in 2002 women owned 6,492,795 firms; Blacks owned 1,197,988 firms; Hispanics owned 1,574,159 firms; Asians owned 1,105,329 firms; and American Indians and Alaskan Natives owned 206,125 firms.
In 2004, there was strong growth of 7.3 percent in proprietor’s income - a partial measure of small business income. Business bankruptcies decreased by 2.1 percent and self-employment increased by 2.2 percent. This and other data for each state and territory are available in individual economic profiles on the Office of Advocacy website at www.sba.gov/advo/research/profiles.
The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit www.sba.gov/advo, or call (202) 205-6533.