Question

Evaluate the differences small, medium and large businesses make to the economy, applying relevant data and statistics.

Answer 1

Small and medium-sized firms characterize an importance as they are source of vitality in the economy by way of accounting for a large portion of both gross job gains and gross job losses. Small businesses as suggested by the evidence create a significant majority of net new jobs in an average year. Small firms with less than 20 employees have generated bulk of net new jobs as is evident from the past decade. Small firms have accounted for 79.5 percent of the net new jobs (1990 to 2003) in-spite of employing less than 18.4 percent of all jobs in 2003, while as midsize firms accounted for 13.2 percent of the net new jobs, and large firms accounted for 7.3 percent although large firms pay higher wages than small firms (small firms pay forth of their employees less than $8 per hour, if this is compared to the large companies they pay the same amount to less than 3% of employees). In case of Small businesses, they largely thought to be more innovative than larger firms but medium and large sized are also too good and effective in innovation. The jobs provided by medium and large businesses are highly paid jobs that are stable with good benefits which is not in case of small businesses. Small firms in USA accounts for 99.7% of employer firms, net new private-sector jobs equal to 63%, private-sector employment equal 48.5%, private-sector payroll equals 42% , 46% of private-sector output, 37% of high-tech employment, 98% of firms exporting goods while it accounts for 33 % of exporting value. Small businesses represent 53% of U.S. workers while as large businesses employ 38% of the U.S. workforce.