tailieunhanh - An Analysis of Small Business and Jobs by Brian Headd Office of Advocacy

The difference in these answers arises from the way each source defines “small business,” which data (and associated methodology) are used, and the time period analyzed (Okolie, 2004). The Office of Advocacy uses the generally accepted small business definition of a firm with fewer than 500 employees. However, Advocacy has provided partial funding for SUSB to create subset firm sizes allowing users to examine other categories of small businesses and understand the nuances of different firm size classes. . | An Analysis of Small Business and Jobs by Brian Headd Office of Advocacy Office of Advocacy advo Release Date March 2010 This report was developed within the Small Business Administration Office of Advocacy and contains information and analysis that was reviewed and edited by officials of the Office of Advocacy. However the final conclusions of the report do not necessarily reflect the views of the Office of Advocacy. Small and large firms have differing roles in the labor market. Relatively new data now allow us to better dissect the labor market with respect to job flows hires fires retires and job hoppers and firm size and even in some instances firm age. Understanding who creates and destroys jobs is paramount as we seek a solution for our loss of over 7 million net jobs from December 2007 to December While small and large firms provide roughly equivalent shares of jobs the major part of job generation and destruction takes place in the small firm sector and small firms provide the greater share of net new jobs. In some ways this role as a major creator and destroyer of jobs is a result of being the major creator and destroyer of businesses in general. The term for this in small business research circles which was popularized by Joseph Schumpeter 1942 is creative destruction. David Birch 1979 discovered that the end result of small businesses creative destruction was a net increase in employment. This finding was the seed for the small business employment discussion that continues to the present day. And even more important than the ensuing debate about Birch s findings was the motivation to gather new kinds of data to better analyze Birch s This has led us to two decades of a data evolution with respect to small business employment The following is a primer for understanding some basic facts about small businesses role in employment and the data that are available to form opinions and develop hypotheses. The paper is .