It is known that Americans worship small businesses which are considered as the main engine for growth of the economy. Wall Street Journal Market Watch, stated it as a myth.
It is known by all that about two-thirds of the jobs in the United States are created by small businesses. However, the data was based on the definition of small pertaining to the small businesses. This includes the concern of size of the business. According to the Small Business Administration, a company is said to be ‘small’ if it has less than 500 employees. Also, the annual revenue of some firms was found to be as high as $35.5 million and still they would be considered as ‘small’. According to this definition, small businesses were involved in giving employment for half of the U.S. workers.
However, when the small business is defined as the one having less than 100 employees, it can be said that about one third of the U.S. workers were given employment by these small businesses. So based on the concern of size of the small businesses, there would be a change in the contribution regarding employment, revenues, and exports.
It was observed that the age of the business was more important than the size. This can be explained by an example. It was observed that in 2005, 3.5 million jobs were provided by brand-new companies and at the same time more than 1 million jobs were lost in the matured businesses. It was reported that more employment was observed in the newly emerging companies but not the older ones. Hence, it was suggested that instead of smallness it was newness that created interest among small businesses. So entrepreneurship should be encouraged for achieving a dynamic economy.