Small Business…BIG Impact

When you are talking about economic impact, small business is a BIG deal.  For two years I had the opportunity to serve as the CEO of the Arizona Small Business Association and and on the Board of Trustees of the National Small Business Association.  During that time.  I sat and talked with many small business owners, toured their offices and factories, listened to their stories,  and then traveled to the Arizona Capitol and to Washington D.C. to share those stories with Senators and Representatives. 

Retreats at the Edward Lowe Foundation in Cassopolis, Michigan and visits to the Ewing Marion Kauffman Foundation in Kansas City where times to exchange ideas with economic developers from around the country on how to make a difference in our local communities as well as at the national level.

Let’s look at the facts from the most recent SBA Office of Advocacy Report

In the United States, small firms with less that 500 employees:

  • Represent 99.7 percent of all employer firms.
  • Employ just over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.
  • Create more than half of the nonfarm private gross domestic
    product (GDP).
  • Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
  • Are 52 percent home-based and 2 percent franchises.
  • Made up 97.3 percent of all identified exporters and produced  30.2 percent of the known export value in FY 2007.
  • Produce 13 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.

Source: SBA office of Advocacy,  U.S. Dept. of Commerce, Bureau of the Census and International Trade Admin.; Advocacy-funded research by Kathryn Kobe, 2007  and CHI Research, 2003 ; U.S. Dept. of Labor, Bureau of Labor Statistics.

Where will recovery REALLY come from?

Today, economists and business experts are saying that “the recession is over and we are beginning our gradual climb out.”  Assuming that Wall Street and the financial markets don’t implode again, they are probably right.  But if we want to speed up the recovery process, we need  to shift our thinking and economic support more to what can we do DIRECTLY to give small businesses the resources that they need to grow.  That is where the real net job growth will come from.  Until  we get our unemployment problem solved, we don’t get our consumer confidence problem resolved.  If no one is buying – there is no recovery.   It’s that simple.

We need jobs to get the economy growing again and that means we need to supply the resources SMALL Businesses need to create jobs.  Current programs to provide training and loans for ‘bankable’ businesses are being provided at a variety of levels.  But the sad truth is that many high growth potential small businesses are not not bankable by today’s standards.  The economic conditions of the last year have hit their balance sheets too hard.

The graph below shows where job growth actually came from in the period from 2005 to 2007.  Stage One firms are those with less than 10 employees.  Stage Two is 10- 99 employees, Stage Three is 100 – 499, and Stage Four is BIG Business 500+ employees.  What you are looking at is a national snapshot, but you can look at your state, country or MSA also at


It’s time for something new

If we want to jump start the economy and get on the road to real recovery, maybe its time for a new type of economic stimulus.  Instead of investing in programs to train small business on how to grow – lets create new programs to allow them the access to capital they need to actually do it.  The old ways are not working very well – and in the words of the last election – IT’S TIME FOR CHANGE.

Thanks for stopping by.  Stay tuned…

Joan Koerber-Walker

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