Small Businesses Play an Important Role in the US Economy

The title says it all and it’s true… For many, small businesses are just local businesses and it is the big industrial giants that are contributing to the economy of the US. We need to correct them and change their wrong perception.

Studies show that small businesses employ over half of US workforce. According to SBA, small businesses employ half of all private sector employees. Wondering if small businesses were not there, then where would half of the country work? No clue…

It is not only the workforce (creating more number of jobs) where small businesses are big players; they have also majorly contributed towards innovation, supporting the big businesses, generating revenue, exporting and customer service.

Small businesses are the engines of job creation
According to the SBA report, since 1970, small businesses are adding 8 million new jobs, whereas big businesses are eliminating 4 million jobs. Small businesses have contributed 55% of all private sector employment to their nation. These numbers clearly show that without small businesses half of the US population would have been jobless and the impact on the US economy would have been devastating.

Another amazing fact about small businesses is that they pay 44% of total US private payroll. This again supports the country’s economy.

Small businesses are proven innovators
Small businesses are well positioned to introduce and develop new ideas. They are innovators and drivers of the US economy. Small businesses have created 17 times more patents per employee than large patenting firms. They have created 43% of high-tech jobs (engineers, computer programmers, scientists). Innovation is the driving force behind the strong and growing economy of US.

Presence of small businesses is essential for large businesses
Large businesses depend on small businesses on outsourcing their various business affairs like bookkeeping, customer support, search engine marketing, payroll, etc. If small businesses did not exist then large businesses would have struggled a lot in improving, marketing, managing and growing their businesses.

Small businesses are customer oriented
Small businesses do everything that can satisfy their customer needs and are available for their customers at all times. To help you understand, below is a survey by CreditDonkey:

  • 71% of participants have said that small businesses anticipate their needs, whereas 42% of them have said big businesses anticipates their needs.
  • 64% of participants have said that small businesses anticipate their problems, whereas only 34% of them have said that big businesses anticipate their problems.
  • 97% of participants have said that small businesses are consistently saying “Thank you”, whereas only 30% of participants have said that big businesses are saying consistently “Thank you”.
  • 94.3% of participants have said that small businesses exceeded their expectation in providing customer services, whereas 64% of participants said that big businesses exceeded their expectation in customer service.

Small businesses have a major role in exporting
According to USTR (United States Trade Representative) small businesses account 98% of US exporters whereas big businesses account only 0.2%. Small businesses produce 34% of export value through their goods in exporting to other nations. Exporting plays a major role in strengthening the country’s economy. According to US Department of Commerce, nearly 12% of GDP comes from the export of goods and services. Without the impact of small businesses, American exports would have significantly damaged the US economy.

From the above statistics it is very clear that small businesses play a very major role in economic success of US. They provide the country with employment, wealth, innovation and development.

No nation was ever ruined by trade – Benjamin Franklin

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