AKSourceLink Blog

Small Businesses and Job Creation

Posted by Nolan Klouda on Oct 18, 2011

We all know that small businesses are a major engine of job growth; data indicate that small businesses created almost two-thirds of all new jobs over the past 17 years, according to the Small Business Administration. But, as Carl Bialik at the Wall Street Journal points out, there's an interesting story behind the numbers.

First off, the SBA considers companies with 500 or fewer employees to be small businesses, but many of these firms aren't exactly "mom and pop" enterprises. Here's the breakdown:

Bialik also notes that it isn't the size of the business that matters for job creation, but its age. Newer businesses, which are likely to be small, usually need to hire more people to fill key positions than established firms, who are already staffed. (There is some evidence that newer businesses have been slow to hire in recent years, however.)

Of course, none of this information diminishes the vital role entrepreneurs play in creating jobs (and thus livelihoods) for countless millions, but the story behind the numbers is nonetheless interesting.

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