NEWSRELEASE
SBA Number:
02-03 ADVOSmall Business Share Of Private, Nonfarm GDP At 52 Percent
WASHINGTON, D.C. – Small business share of the private, nonfarm economy has increased to 52 percent over the last decade, according to a report released today by the Office of Advocacy of the U.S. Small Business Administration (SBA). The growth has been driven by the shift in the economy towards small business dominated sectors, such as services.
The growth of small business private, nonfarm Gross Domestic Product (GDP) shows the continuing importance of small business to the overall health of the U.S. economy. "As firms start, grow, merge, split, contract, and exit over time, small firms continue to produce the majority of private economic output," said Tom Sullivan, Chief Counsel for Advocacy. "While individual firms and economic sectors experience growth or decline, the vital role of small business remains the same. It’s clear that the health of small business in general drives our economy, and that it will be small business that leads us out of our current economic downturn," he said.
The study, performed by Joel Popkin and Company, also highlighted small business share of various sectors of the economy. The authors found that small businesses constitute 68 percent of services, 65 percent of wholesale and retail trade, and 27 percent of mining and manufacturing. Mining and manufacturing is significant, since it is the only sector where small business increased its share over the last two decades. Changes in share are affected by business turnover, as well as by growth of small businesses into large firms.
More information can be found on the Office of Advocacy website, www.sba.gov/advo. A Research Summary and full report are available at http://www.sba.gov/advo/research/rs211.pdf and http://www.sba.gov/advo/research/rs211tot.pdf. Technical questions may be addressed to Dr. Radwan Saade, Regulatory Economist by e-mail at radwan.saade@sba.gov, or by mail to the Office of Advocacy, U.S. Small Business Administration, 409 Third Street, S.W., Washington, D.C. 20416.
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Created by Congress in 1976, The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The Chief Counsel for Advocacy, who is appointed by the President and confirmed by the U.S. Senate, directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Issues are identified through economic research, policy analyses, and small business outreach. The Chief Counsel’s efforts are supported by offices in Washington, D.C., and by Regional Advocates located across the United States. For more information on the Office of Advocacy, visit http://www.sba.gov/advo, or call (202) 205-6533.