How important are small businesses to the U.S. economy?

Small Firms

·          Represent 99.7 percent of all employers.

·          Employ half of all private sector employees.

·          Pay 44.3 percent of total U.S. private payroll.

·          Small firms generate 60 to 80 percent of net new jobs annually.

·          The small business share of non-farm private gross domestic product (GDP) is more than 50 percent.

·          In FY 2001, small businesses supplied goods and services valued at 22.8 percent of the total value of federal prime contracts (about $50 billion).

·          Small patenting firms produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be  among the one percent most cited.

·          In 2001, 39 percent of high tech jobs (such as scientists, engineers, and computer occupations excluding teachers) were in firms with fewer than 500 employees

·          Small businesses are 53 percent home-based and 3 percent franchise.

·          In 2001, small businesses made up about 97 percent of all identified exporters and produced about 29 percent of the known export value

Sources:     U.S. Bureau of the Census; Advocacy-funded research by Joel Popkin and Company (Research Summary #211); Federal Procurement Data System; Advocacy-funded research by CHI Research, Inc. (Research Summary #225); Bureau of Labor Statistics, Current Population Survey; International Trade Administration.

[“Answers to Frequently Asked Questions” Small Business Administration]