Impact of Small and Medium Businesses on US Economy

Posted on October 30, 2013 by

The number of small businesses in the United States has increased by 49% since 1982. Today, small and medium businesses are the backbone of the country. SMBs contribute a major part in country’s economy and job creation. Following are some facts that will ‘change your mindset’ towards small businesses.

  • GDP:
    • Small businesses account for more than half of the non-farm private gross domestic product (GDP).(1)
  • Patents:
    • Compared to large firms, small businesses have 16 times more patents per employee.(1)
  • Sales:
    • Small businesses account for 50% of all sales in the US.(2)
  • Overview:
    • In the US, 99.7% are small businesses, and the rest 0.3% are large firms.(1) There are about 28 million small businesses, whereas large firms are only 18,500.(1)
    • Small businesses occupy 30 to 50% of all the commercial space, which is equivalent to over 20 to 34 billion square feet.(1)
    • 65% of customers say that the small businesses exceed their expectations in customer service whereas only 13% large firms are able to do so.(6)
  • Job creation:
    • Since 1970, small businesses contributed 55% of all jobs and 66% of all net new jobs.(1)
    • Small businesses created 43% of high tech jobs (engineers, scientists, computer programmers and others).
    • Since 1990, as big businesses removed 4 million jobs, small businesses added 8 million new jobs.(1)
    • Existing businesses in the US contributed 60% of the private-sector’s net new jobs while the rest 40% was contributed by the star-up firms.(1)
    • Nearly 6 million small businesses with fewer than 20 employees account for 90% of all the US employers and created employment for 20 million people.(4)
  • Exports:
    • Small and medium-sized businesses (SMBs) are the largest group of the US exporters and contribute to a major part of gross domestic product (GDP).(3)
    • Small and medium-sized businesses account for 98% of the US exporters, whereas large firms account only 2%.(5)
    • Small businesses account for 97% of all the US exporters.(3)
  • Customer Service(6)People in the US are more happy with the customer service of small businesses than big businesses.
    • More than 90% of the respondents in a survey conducted by CreditDonkey said that, the service provided by small businesses exceeded their expectations, whereas only 64% said that big businesses exceeded their expectations in customer service.
    • According to the CreditDonkey survey, small businesses do a better job than big businesses:
      • 71% of respondents said that small businesses anticipates their needs, whereas 41.8% of respondents said that big businesses anticipates their needs.
      • 63.9% of respondents said that small businesses anticipates their problems, whereas 33.8% of respondents said that big businesses anticipates their problems.
      • 96.9% of respondents say that small businesses consistently say “Thank you”, whereas 80.8% of respondents say that big businesses consistently say “Thank You”.
      • 68% of respondents say that small businesses are following up whereas 30.5% of respondents said that big businesses are following up.

Source:
1. SBA
2. BCG
3. Trade and economy
4. Fair Tax
5. USTR
6. CreditDonkey report

Comments are closed.