Small businesses are often seen as the backbone of the economy, but their true impact is more profound than we might realize. In 2024, small businesses employ nearly half of the workforce in the United States, with over 60 million Americans working for businesses with fewer than 500 employees. These businesses are not just small players, they are the lifeblood of job creation and economic growth.
As large corporations scale back and automation continues to rise, small businesses are taking up a bigger portion of the labor market. Let’s break down why small businesses matter more than ever and how they are driving job creation.
Over the last decade, the role of small businesses in the job market has expanded rapidly, especially in response to major economic shifts. According to a 2019 survey by the National Federation of Independent Business (NFIB), nearly 90% of small business owners reported that they were actively hiring or planned to hire within the next six months. This trend has only grown, especially as businesses increasingly focus on resilience, innovation, and agility in the face of challenges.
The COVID-19 pandemic accelerated these trends, pushing many people toward entrepreneurship or remote work. Small businesses were pivotal in the recovery of the labor market, with an estimated 1.4 million new businesses being created in the U.S. alone in 2020. This number was a 24% increase from the previous year, proving that when larger businesses faltered, small businesses rose to fill the gap. A great deal of this happened from individuals staring their side hustles that have flourished into full time small businesses.
Small Businesses as the Engine of Innovation
Small businesses often drive innovation in ways that large corporations can’t. Without the red tape and corporate structure, small businesses are able to pivot quickly, try new things, and take risks that lead to new jobs and new industries. A study by McKinsey & Company found that small businesses are more likely to innovate than larger companies, particularly in sectors like technology and creative industries.
This spirit of innovation not only leads to new products and services but also creates jobs that didn’t exist before. Think about the rise of remote work tools or e-commerce platforms—many of these innovations came from small businesses seeking to fill a gap in the market. As these innovations grow, so too do the opportunities for employment.
Small Businesses Are Bigger Than Ever
From providing the bulk of new job opportunities to driving local economic growth and innovation, small businesses are not just surviving they are thriving and expanding their role in the job market. Whether you’re an entrepreneur, a job seeker, or someone looking to make an impact, small businesses offer opportunities that larger corporations simply can’t match.
According to the U.S. Small Business Administration (SBA), small businesses are responsible for 66% of all new jobs in the private sector. In fact, the number of small businesses continues to rise, with over 30 million small businesses operating in the U.S. today. This includes everything from mom-and-pop shops to tech startups, restaurants, and family-owned enterprises.
The diversity of industries in which small businesses operate means that they are constantly creating new opportunities across the board. They don’t just create jobs, they create opportunities for growth, innovation, and a wide range of specialized positions. There are businesses that pick up dog poop and clean garbage cans in my neighborhood. The possibilities are endless at this point.
The job market is no longer dominated by just a few large corporations. Small businesses are the true job creators, and they’re changing the face of work as we know it.
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