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

Small fi rms:
• Represent 99.7 percent of all employer fi rms.
• Employ about half of all private sector employees.
• Pay nearly 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).
• Hire 40 percent of high tech workers (such as scientists,
engineers, and computer workers).
• Are 52 percent home-based and 2 percent franchises.
• Made up 97.3 percent of all identifi ed exporters and produced
28.9 percent of the known export value in FY 2006.
• Produce 13 times more patents per employee than large
patenting fi rms; these patents are twice as likely as large
fi rm patents to be among the one percent most cited.
Source: U.S. Dept. of Commerce, Bureau of the Census and International
Trade Administration; Advocacy-funded research by Kathryn Kobe, 2007
(www.sba.gov/advo/research/rs299tot.pdf) and CHI Research, 2003 (www.
sba.gov/advo/research/rs225tot.pdf); Federal Procurement Data System;
U.S. Dept. of Labor, Bureau of Labor Statistics.



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