Small Business Reading Room

Tuesday, April 17, 2007

Small Business is Good for You (really)

Here's something we all knew already.

Small business is the engine that helps run our nation's economy.

According to a study released yesterday by the Office of Advocacy, small business generates 50 percent of the private, nonfarm gross domestic product (GDP) of the USA. The study covers the period 1998 - 2004, and confirms the findings of earlier research.

The Small Business Share of GDP, 1998-2004 (pdf), written by Katherine Kobe of Economic Consulting Services with funding from the Office of Advocacy, is the first study of its kind to use the North American Industry Classification System (NAICS) as the basis for analysis.

Use of this system allows the small business share of total GDP to be categorized into 16 major industrial sectors. The small business share of the GDP in each major industrial sector in 2004 ranged from 18 percent of the information sector to 85 percent of other services.

Any way you look at it, small business is a big contributor to the growth and prosperity of the nation.

The Office of Advocacy, the "small business watchdog" of the federal 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.

For more information, visit the Office of Advocacy of the U.S. Small Business Administration.


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