Small business growth

A study by CEPR (Center for Economic and Policy Research) on International Comparison of Small Business Employment show that the small business sector in the United States is among the smallest in the world, as reported by the Economix.

The conclusion from the finding:

By every measure of small-business employment, the United States has among the world’s smallest small-business sectors.

A snapshot into the survey

To give you some ideas on how small US’ small business sector is, consider these findings:

• The United States has the second lowest share of self-employed workers (7.2 percent) – only Luxembourg has a lower share (6.1 percent) – 19 other countries have higher share than the US.
• The United States has among the lowest shares of employment in small businesses in manufacturing (11.1 percent.) Only Ireland (9.6 percent) and Luxembourg (8.5 percent) have a lower share than the US – 18 countries have higher share than the US.
• U.S. small businesses have a much lower share of employment than the other surveyed countries in the two high-tech fields: computer-related services and R & D.
• The United States has the second lowest share of computer-related service employment in firms with fewer than 100 employees (32.0 percent.) Only Spain had a lower share (27.0 percent) than the US – 13 other countries has higher share than the US.
• The United States has the third lowest share of research and development-related employment in firms with fewer than 100 employees (25.3 percent). Only the United Kingdom (22.5 percent) and the Netherlands (20.3 percent) had a lower share than the US – 9 other countries has higher share than the US.

What the findings signify

According to the authors of the study, the main culprits of those low numbers are high health care costs and high corporate income tax rate.

To be honest, the situation is a bit pathetic, considering the problems lingering small businesses today, including the rising income tax for small business owners and health care reform issues. The US Government and the Small business owners should work together, better to encourage growth – in size and number – that will spark recovery of the economy.

Otherwise, we keep trapping ourselves in quick sand of the downturn economy – Not a pleasant place to be in.

Ivan Widjaya
Small businesses need boost – A lot
Image by AP-TURE.