The United States has the most advanced software and information technology (I.T.) services industry globally. More than 40 percent of the $5 trillion global I.T. market is in North America, primarily the United States. The industry accounts for $1.8 trillion of U.S. value-added GDP (more than 10 percent of the national economy) and 11.8 million jobs. According to CompTIA, more than 525,000 software and I.T. services companies in the United States. 40,500+ tech startups were incorporated in 2018 alone. This includes software publishers, custom computer programming services suppliers, computer systems design firms, and facilities management companies. The industry draws on a highly educated and skilled U.S. workforce of nearly two million people, which has continued to grow during the past decade.
Small enterprises accounted for 64% of the net new jobs created between 1993 and 2011 — or 11.8 million from the net new jobs created 18.5 million —. During the recovery from the Great Recession of mid-2009 to 2011, small businesses accounted for 67% of net new jobs created, led by large companies with 20 to 499 employees. Data and research from the SBA Office of Advocacy Fund show that small businesses produce more than half of all new private non-agricultural gross domestic product and generate 60-80% of all new net jobs.
Firms with fewer than 500 employees – drive the U.S. economy, creating jobs for nearly half of the U.S. private workforce. Small businesses account for 42.9 percent of all American payrolls, driving a ton of consumer spending into the economy and tax dollars into our state budget. Since 1995, small businesses have created two of three net new jobs (64 percent) in our country.
According to the U.S. Census Bureau, 27.9 million small businesses in the United States in 2010 compared with 18,500 large companies with 500 employees or more. These small businesses account for 54% of all U.S. sales. And 600,000 small franchise businesses across the country generate 40 percent of retail sales and provide jobs for 8 million people.
While large multinationals are often in the spotlight, small businesses are more important than many think. Not only that, small businesses reflect the diversity of the U.S. population. The U.S. population comprises 23 million Latino business owners, 19 million black business owners, and 16 million Asian business owners. While they offer overwhelming benefits to the economy, these small businesses do not receive similar government assistance as big companies. SMEs employ half of America’s private workforce.
Small businesses are collapsing under the guise of restaurants, hairdressing and nail salons, gyms, and small retailers struggling to make ends meet as their traditional model of physical store experience stalled in March with the rise of C19. Local online marketplace Yelp reported that more than 160,000 stores have closed, and 60% are unlikely to reopen. Restaurants, small retailers, beauty salons, spas, bars, nightlife, and gyms are the most brutal hit.
In 2018, 170,000 American small and medium enterprises exported goods worth approximately $250 billion to TPP countries. Although the impacts are not the same everywhere, certain industries and geographies are more affected than others, with energy, transport, health, leisure, and food services having the most significant impact. For banks and policymakers, these results underscore the importance of getting money out of business and streamlining business as much as possible to get money back into the business.
Entrepreneurship and small business creation are the bedrock of the U.S. economy, with new small businesses responsible for net job creation in the U.S. and an essential component that has proven resilient to recessions as the COVID-19 crisis continues to unfold. Many small and medium-sized enterprises remain small and experience considerable size. Still, small business startups account for 40% of all public trading enterprises in the U.S., 60% of market capitalization, and 80% of research and development. During the pandemic, hundreds of thousands of SMEs went bankrupt, but at the same time, hundreds of thousands of new businesses were set up.
Small businesses provide fast, flexible, and cost-effective services that many large companies dismiss as insignificant activities for themselves. This range of services includes support for corporate development, strategy, and marketing. Small businesses provide food service, accounting, customer service, and technical support to meet the needs of large companies only some of the services that small businesses provide.
There are millions of others who contribute to our standard of living. Entrepenurers like Bill Gates (Microsoft), Sam Walton (Wal-Mart), Steve Jobs (Apple Computer), Michael Dell (Dell Inc), Steve Case (AOL), Pierre Omidyar (Ebay), Larry Page (Oracle), and Sergey Brin (Google) have changed the way startups transformed into large enterprises.
The diversity and importance of small and medium-sized enterprises (SMEs) celebrated on 27 June by the United Nations International Council for Small Enterprises (IFAC) as part of the U.N. Day of Micro, Small, and Medium-sized Enterprises (MSMEDAY19). Most organizations are small, but their global importance to developing economies and societies is undeniable. SMEs play an essential role in achieving the Sustainable Development Goals of the United Nations (SDGs 8: promoting inclusive and sustainable economic growth, employment, and decent work ), building resilient infrastructures, promoting sustainable industrialization, and promoting innovation. SMEs not only contribute to the economy, but they are also the key driver of the economy.
Census data shows that in 2020, employers applied to the IRS for 4.3 million new employer identification numbers to identify new businesses. This represents a growth of 2.4% from 2019 onwards.
References:
www.selectusa.gov
https://www.un.org/development/desa/disabilities/envision2030-goal8.html
https://www.thoughtco.com/how-small-business-drives-economy-3321945
https://www.npd.com/news/blog/2020/smb-reemergence-critical-to-post-covid-economy
https://markaaz.com/smbs-the-backbone-of-global-economy
https://www.linkedin.com/pulse/reboot-us-economy-built-around-small-business-jeff-richards
