How important are small businesses to the U.S. economy?

Small firms:
• Represent 99.7 percent of all employer firms.
• Employ about half of all private sector employees.
• Pay more than 45 percent of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
• Create more than half of nonfarm private gross domestic product (GDP).
• Supplied 22.8 percent of the total value of federal prime contracts in FY 2006.
• Hire 40 percent of high tech workers (such as scientists, engineers, and computer
• Are 52 percent home-based and 2 percent franchises.
• Made up 97 percent of all identified exporters and produced 28.6 percent of the known
export value in FY 2004.
• Small innovative firms produce 13 times more patents per employee than large
patenting firms, and their patents are twice as likely as large firm patents to be among the
one percent most cited.

Source: U.S. Dept. of Commerce, Bureau of the Census; Advocacy-funded  research by
Kathryn Kobe, 2007 (; Federal Procurement
Data System; Advocacy-funded research by CHI  Research, 2003
(; U.S. Dept. of Labor, Bureau of Labor
Statistics, Current Population Survey; U.S. Dept. of Commerce, International Trade