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Why Small Businesses are essential to the American economy

1. Why are small businesses so important to the American economy? What are the growth trends for small businesses? What are the reasons behind these trends? Will they continue? Give examples of how small business affects the economy of the area where you work or live.

2. Which motivation theory do you like best? Explain why. Where have you seen it work well? What factors should you consider when choosing a motivational approach?

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Why are small businesses so important to the American economy?

What really drives the U.S. economy? No, it is not war. Small business -- firms with fewer than 500 employees -- drives the U.S. economy by providing jobs for over half of the nation's private workforce. The latest figures from the SBA show that small businesses with fewer than 20 employees increased employment by 853,074 during 2001-2002.
These and other statistics outlining small business' contribution to the economy are contained in the Small Business Profiles for the States and Territories, 2005 Edition from the Office of Advocacy of the U.S. Small Business Administration (SBA).

"Small business drives the American economy," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy in a press release. "Main Street provides the jobs and spurs our economic growth. American entrepreneurs are creative and productive, and these numbers prove it."

Small businesses are job creators. Office of Advocacy funded data and research shows that small businesses represent 99.7 percent of all firms, they create more than half of the private non-farm gross domestic product, and they create 60 to 80 percent of the net new jobs.

In 2004, there were an estimated 23,974,500 businesses in the U.S. Of the 5,683,700 firms with employees, 5,666,600 were small firms.

The latest data also show ...

Solution Summary

An explanation and detailed account of why small businesses are so crucial to the American economy. The solutions talks about growth trends for small businesses and the reasons behind the trends. Additionally there is information provided regarding motivation theory and where it has worked well.