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SBA: Small business share of GDP continues structural decline

February 07, 2019

The share of the nation’s economy stemming from small businesses — “the lifeblood of the U.S. economy” — has waned since 1998, according to a new report by Kathryn Kobe and Richard Schwinn on behalf of the U.S. Small Business Administration’s Office of Advocacy. Despite overall growth in small business GDP, the number of small businesses and their employment levels have not yet recovered from their pre-recession value. At the same time, the numbers of large businesses and large business employees have grown continuously, and large business GDP makes up an increasing share of the national pie.

The authors conclude their report by noting that the recession explains only a small portion of the decline in small business share of GDP. Instead, they write, structural factors are the root cause, including a lack of capital for small businesses, the rise of big-box stores, concentration in large industries, and long-run declines in business dynamism. The full report is available here, and a link to the summary article is here.

 

sba, small business, entrepreneurship