Small Firms in the U.S.

The role that small businesses play in the U.S. economy

Based on the Bureau of the Census and International Trade Administration: Advocacy-funded research by Kathryn Kobe, 2007, the following was determined:

Small Firms:

• Represent 99.7 percent of all employer firms.
• Employ about half of all private sector employees.
• Pay nearly 45% of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
• Create more than half of nonfarm private gross domestic product (GDP).
• Hire 40 percent of high tech workers (such as scientists, engineers, and computer workers).
• Are 52 percent home-based and 2 percent franchises.
• Made up 97.3 percent of all identified exporters and produced 28.9 percent of the known export value in FY 2006.
• Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large patents to be among the one percent most cited.

It is easy to see how important a role small firms, home-based businesses and the spirit of entrepreneurship plays in the U.S. economy.