Small business is a big contributor to the nation's economy, generating 50 percent of the private, nonfarm gross domestic product (GDP), according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. The study covers the period 1998 - 2004, and confirms the findings of earlier research.
"Small business plays a big role in our economy," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "This study confirms just how important small business is to our economic growth and prosperity. It makes clear that economic policy needs to take into account the needs of small businesses, because those businesses drive our economy."
The Small Business Share of GDP, 1998-2004, 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.
Over the seven-year period studied, the small business share of GDP held steady at around 50 percent. However, there has been a long-tern decline from the late 1950s when the small business share of GDP was approximately 58 percent.
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 and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo.
Washington - April 16, 2007
Release Number: 07-12 ADVO
Contact: John McDowell, (202) 205-6941,
john.mcdowell@sba.gov
Information courtesy of the Small Business Administration.
