WASHINGTON, D.C. - American small business had a good year in 2004, according to a report issued today by the Office of Advocacy of the U.S. Small Business Administration. The report, The Small Business Economy 2005 Edition, documents the state of small business and its contributions to the economy using the latest data for 2004.

“2004 was a good year for American small business,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “The economic environment fostered entrepreneurial activity. The gross domestic product increased, the economy added jobs, and new employer firms and the number of self-employed increased.” He made the remarks at the report’s release before the National Economists Club.

The comprehensive report examines the role small business plays in the economy. Key segments focus on the economic environment, regulations, innovation, tax policy, minority and veteran entrepreneurship, federal government procurement, and small business financing data.

This year’s report includes a paper from Dr. William Baumol, a renowned economist specializing in entrepreneurship. The paper, “Small Firms: Why Market-Driven Innovation Can’t Get Along Without Them,” examines the reasons why small firms have contributed a critical share of radical innovative breakthroughs.

The report also contains a paper authored by Advocacy economists Drs. Radwan Saade and Joe Johnson on the benefits of a more simple and predictable tax code.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.