Small Businesses Show Increasing Role in Job Creation

11/3/2017 10:00 AM

During the last two decades, existing companies have been the force behind new jobs, according to the SBA.


Since the end of the Great Recession, private sector small businesses have had a growing influence over job creation, new research from the U.S. Small Business Administration (SBA) Office of Advocacy said.

Small businesses create two out of three net new private-sector jobs, and since the end of the Great Recession, companies with fewer than 500 employees have created 62 percent (8.3 million) of the net new private-sector jobs (13.4 million), matching their historic rate over the last 25 years, according to the Office of Advocacy’s fact sheet “Small Business: Job Creation Deconstructed.”

 “[Forty-eight] percent of ACA member organizations (1,164 companies) have fewer than nine employees. Additionally, 86 percent of members (2,080 companies) have 49 or fewer employees and 93 percent of members (2,257 companies) have 99 or fewer employees,” ACA International reports in the white paper, Small Businesses in the Collection Industry: An Overview of Organization Size and Employment

The SBA also indicates that a majority of the net change in job creation is from existing companies. “Over the last two decades, 66 percent of the private-sector net new jobs were from existing businesses and 34 percent were from business turnover (gains from startup business establishments minus losses from closures),” the SBA’s fact sheet said.

The fact sheet with more research on job creation from small businesses is available through the SBA’s website.

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