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Googling "what percent of economy is small business" yields http://usgovinfo.about.com/cs/businessfinance/a/sbatopten.htm http://usgovinfo.about.com/cs/busines

by smokeyj 14y ago

Googling "what percent of economy is small business" yields http://usgovinfo.about.com/cs/businessfinance/a/sbatopten.htm http://usgovinfo.about.com/cs/businessfinance/a/sbatopten.ht...

EGreg 14y ago
10. Small businesses make up more than 99.7% of all employers. 9. Small businesses create more than 50 percent of the nonfarm private gross domestic product (GDP). From this it follows that "not-so-small businesses" create the other 50% of nonfarm private GDP, despite being only 0.03% of employers right? So what is the conclusion exactly?
- xmodem 14y ago
  The conclusion is simple - economies of scale for larger businesses are incredibly powerful.
  - deleted 14y ago
    [deleted]
  - EGreg 14y ago
    To me it says that small businesses are the long tail, but large businesses are also interesting and valuable in their own right. Both are going to be around, and a "healthy" distribution is probably good for us.
- ronilan 14y ago
  That small businesses do not control resources (natural or otherwise) from which production can be extracted at a high per-employee ratio.
  - tbrownaw 14y ago
    6. Small businesses employ about 50 percent of all private sector workers. Not-so-small businesses do have slightly higher production per employee, but not that much more (assuming that "more than 50%" implies "less than the next round percent after 50"). What it really means is that 99.7small-business-size == 0.3large-business-size ==> not-so-small businesses average 330x as big as small businesses. Which is perfectly understandable, for example my employer has something like 10k employees.
- T-hawk 14y ago
  The conclusion is that you're misinterpreting that number. Small businesses are 99.7% of employers, but do not hire 99.7% of employees and do not represent that fraction of business activity. "An employer" is not a meaningful unit of economy because it varies so wildly in size. This argument is like comparing the United States to the other 199 countries in the world and concluding that the US should represent 0.5% of world economic activity. It's mistakenly treating entities of vastly different sizes as equivalent in the same population set.

by smokeyj 14y ago

Googling "what percent of economy is small business" yields http://usgovinfo.about.com/cs/businessfinance/a/sbatopten.htm http://usgovinfo.about.com/cs/businessfinance/a/sbatopten.ht...

EGreg 14y ago

10. Small businesses make up more than 99.7% of all employers. 9. Small businesses create more than 50 percent of the nonfarm private gross domestic product (GDP). From this it follows that "not-so-small businesses" create the other 50% of nonfarm private GDP, despite being only 0.03% of employers right? So what is the conclusion exactly?

xmodem 14y ago
The conclusion is simple - economies of scale for larger businesses are incredibly powerful.
- deleted 14y ago
  [deleted]
- EGreg 14y ago
  To me it says that small businesses are the long tail, but large businesses are also interesting and valuable in their own right. Both are going to be around, and a "healthy" distribution is probably good for us.
ronilan 14y ago
That small businesses do not control resources (natural or otherwise) from which production can be extracted at a high per-employee ratio.
- tbrownaw 14y ago
  6. Small businesses employ about 50 percent of all private sector workers. Not-so-small businesses do have slightly higher production per employee, but not that much more (assuming that "more than 50%" implies "less than the next round percent after 50"). What it really means is that 99.7small-business-size == 0.3large-business-size ==> not-so-small businesses average 330x as big as small businesses. Which is perfectly understandable, for example my employer has something like 10k employees.
T-hawk 14y ago
The conclusion is that you're misinterpreting that number. Small businesses are 99.7% of employers, but do not hire 99.7% of employees and do not represent that fraction of business activity. "An employer" is not a meaningful unit of economy because it varies so wildly in size. This argument is like comparing the United States to the other 199 countries in the world and concluding that the US should represent 0.5% of world economic activity. It's mistakenly treating entities of vastly different sizes as equivalent in the same population set.