Small businesses create the majority of jobs in the US – just like many other developed economies. With jobs comes wealth and prosperity. If this job creation engine shuts down, as we have seen in the last recession, its a disaster.
According to the US Small Business Administration (SBA), Office of Advocacy, the 2019 Small Business Profile indicates that small businesses added 1.8 million net new jobs in the United States during the latest year studied.
The report adds that the US has 30.7 million small businesses, and they employ 47.3 percent of the private workforce. Regarding diversity, there are 8.7 million minority owned business employees.
The 2019 U.S. Profile also shows that in Q3 of 2018, the US economy grew at an annual rate of 3.4 percent. In February 2019, the unemployment rate was 3.8 percent, down from 4.1 percent a year earlier.
Acting Chief Counsel Major L. Clark, III says the data clearly show small businesses are at the forefront of economic growth:
“Each of our country’s 30.7 million small businesses helps drive job growth and economic development in United States. The Small Business Profiles illustrate the vibrancy of each state’s small businesses and their substantial contribution to the state economy.”
How do you drive more small business growth? Policy counts, and typically the number one issue is access to capital.
While the number of banks in the US has declined, demand for credit remains robust. In fact, in 2017, 6.1 million loans under $100,000 (valued at $90.8 billion) were issued by US lending institutions.
Fintechs are emerging as a vital source of access to capital be it from online lending or investment crowdfunding. As finance becomes digitized, policymakers need to adapt and adjust to foster the future of online capital formation.
Even while many early-stage firms fail within the first few years of existence, these same small companies spend their money on hiring employees. These individuals gain insight and knowledge from the experience which can be put to work at their next job … that is, as long as small businesses and the economy continues to thrive.
The complete report is embedded below and separated by state. How did your state do?