Information You Can Use
Small Business Creates America's Jobs

Small business continued to create America’s new jobs in 2004, according to the latest data. The updated U.S. Small Business Profile released by the Office of Advocacy in October shows that small businesses added 1.9 million net new jobs during the latest year studied.
“Small businesses are America’s job-creating dynamo,” said Chad Moutray, chief economist for the Office of Advocacy. “Clearly policymakers need to consider their impact on small businesses when they are making policy decisions.”

Profiles of all 50 states, the District of Columbia, and the U.S. territories are available. Updated data and statistics on America’s small businesses are available at www.sba.gov/advo/research/profiles.

The updated Pennsylvania Profile shows that:
Number of Businesses. Pennsylvania had an estimated total of 1,006,900 small businesses.2 Employer firms totaled 284,800 in 2006, up 1.6 percent from the previous year. Of this total, an estimated 98.4 percent, or 280,200 were small.

Women-owned Firms. In 2002, businesses owned by women numbered 227,100, represented 26.0 percent of the state’s 874,300 businesses, and generated $39.0 billion in revenues. Employer firms owned by women totaled 34,600, an increase of 8.4 percent since 1997. Women numbered 148,000 or 26.9 percent of the state’s self-employed persons in 2006, a decrease of 8.9 percent from the previous year.

Minority-owned Firms. In 2002, Asian-owned firms totaled 22,600, and 7,200 of them were employer firms; Black-owned firms numbered 24,800, and 2,700 were employer firms; Hispanic-owned firms totaled 11,000, and 1,600 were employer firms.

Business Turnover. An estimated 34,928 new employer firms were created in 2006, which is 4.6 percent less than the number created in 2005

Employment Small firms employed 50.3 percent of the state’s non-farm private labor force in 2004, which was below the national average of 50.9 percent.4 These 237,400 firms accounted for 98.4 percent of the state’s employer businesses, and they employed 2.6 million people (Table 1). Small businesses added a total of 77,800 net new jobs between 2003 and 2004.

Small Business Income. Non-farm proprietors’ income, which is a share of small business income, increased by 4.7 percent, from $38.1 billion in 2005 to $39.9 billion in 2006.

Finance. Commercial banks and savings institutions continued to be important sources of small business financing. The number of lending institution branches in the state increased in 2006.

For more information on Small Business Profiles for the States and Territories, contact Victoria Williams at (202)205-6191 or victoria.williams@sba.gov.

Submitted by: Walt Whitmer
Extension Associate, Economic & Community Development, Penn State Cooperative Extension
Associate Director, Northeast Regional Center for Rural Development
7C Armsby Building
University Park, PA 16802
(814) 865-0468
(814) 865-3746 (fax)
wew2@psu.edu

If you have additional comments or questions about this publication or any of those reviewed in ECD Updates please contact Walt Whitmer.