While the giants of industry capture the headlines, it’s the nation’s small businesses, representing 99.9% of all U.S. firms and employing nearly half of the private workforce, that form the true backbone of our economy and are the most dynamic drivers of job creation.
Key Takeaways
- Small businesses with fewer than 500 employees accounted for 99.9% of all U.S. firms and employed 61.7 million people in 2022, representing 46.4% of private sector employment
- In 2023, U.S. small businesses employed 61.2 million workers, comprising nearly half of the private workforce
- Small firms (under 500 employees) provided 62.7% of net new jobs from 1993 to 2019 in the U.S.
- From 2012 to 2022, U.S. small businesses added 17.2 million net new jobs, averaging 1.72 million per year
- Small businesses created 1.6 million jobs in 2022 alone in the U.S.
- Between 1995 and 2022, small firms generated 66% of net job growth in the U.S.
- U.S. small businesses in accommodation/food services employ 10.1 million workers (58% of sector)
- Small firms account for 79.9% of jobs in other services industry in U.S., employing 5.2 million
- In U.S. construction, small businesses employ 2.0 million workers (80.1% of sector employment)
- 30.7% of small business owners in U.S. are Hispanic or Latino, employing diverse workforce
- Women-owned small businesses in U.S. employ 9.5 million workers (2022)
- Veteran-owned small firms employ 5.8 million people in U.S.
- Small businesses contribute 44% to U.S. GDP via employment and output
- U.S. small firms pay $1.5 trillion in payroll annually, 41% of private business payroll
- Small businesses drive 65% of new innovations, boosting employment growth
Small businesses employ nearly half of all private sector workers in the United States.
Demographic Characteristics
- 30.7% of small business owners in U.S. are Hispanic or Latino, employing diverse workforce
- Women-owned small businesses in U.S. employ 9.5 million workers (2022)
- Veteran-owned small firms employ 5.8 million people in U.S.
- Black-owned U.S. small businesses employ 1.2 million workers (2021 data)
- Asian-owned small businesses employ 2.8 million in U.S., highest revenue per firm
- 58% of U.S. small business employees are under 50 years old
- Small businesses employ 40% of U.S. workforce aged 55+
- Immigrant entrepreneurs own 25% of new U.S. small businesses, employing millions
- Rural small businesses employ 20% of non-metro workforce, 7 million jobs
- Urban small firms employ 80% of city workforce in services
- Millennial-owned small businesses (under 40) employ 15 million in U.S.
- Gen Z starting small businesses employ growing share of young workers
- In EU, 65% of SME owners are aged 50+, employing older workforce
- UK small business owners 40% female, employing diverse staff
- 35% Canadian small business owners immigrants, employing 40% immigrant workers
- Australian small business 38% women-owned, employing 50% women
- Indian MSMEs 15% women-owned, employing 30% women in rural areas
- Brazilian small businesses 40% owned by women, key for female employment
- South African SMMEs 30% black women-owned, employing township youth
- Mexican PyMEs 25% women-led, employing 35% female workforce
- Japanese SMEs 70% family-owned, employing multi-generational workers
- German SME owners average age 52, employing skilled apprentices
- French small firms 35% women entrepreneurs, gender-balanced employment
- Italian SMEs 45% family-run, employing regional demographics
- Spanish PyMEs 38% women-owned, high female employment rate
- Dutch small business 42% women owners, diverse migrant employment
- Swedish SMEs 50% women-owned, highest gender equality in employment
Demographic Characteristics Interpretation
While the data paints small business not as a monolithic engine but as a kaleidoscope of local economies—where a Latina owner, a veteran, or a Gen Z founder isn't just a statistic but the actual boss hiring the neighborhood, proving that the backbone of America is delightfully variegated and refuses to be a single shade of grey.
Economic Impact
- Small businesses contribute 44% to U.S. GDP via employment and output
- U.S. small firms pay $1.5 trillion in payroll annually, 41% of private business payroll
- Small businesses drive 65% of new innovations, boosting employment growth
- During recessions, small firms account for 60% of job resilience
- Small business exports support 11.1 million U.S. jobs (41% of exporters)
- SBA loans to small businesses preserved/supported 2 million jobs in FY2022
- Small firms generate $8 trillion in U.S. economic activity yearly through employment
- In supply chains, small businesses enable 50% of large firm jobs indirectly
- Small business tax contributions $700 billion annually to U.S. federal revenue
- Community banks lend 50% to small businesses, supporting local employment
- Globally, SMEs contribute 50% GDP, 60-70% employment in developing economies
- EU SMEs generate 52% added value, sustaining 90 million jobs indirectly
- UK small businesses contribute 52% private sector turnover, £2.4 trillion
- Canadian SMBs 42% GDP, key to employment stability
- Australian small business 33% GDP, multiplier effect on jobs
- Indian MSMEs 30% GDP, 45% exports via employment chains
- Brazilian small firms 30% GDP, 27% formal employment impact
- South African SMMEs 40% GDP, poverty reduction via jobs
- Mexican PyMEs 52% GDP, 72% employment formal/informal
- Japanese SMEs 50% GDP, backbone of employment stability
- German SMEs Mittelstand contribute 55% GDP, export-driven jobs
- French small businesses 43% GDP value added, employment intensive
- Italian SMEs 67% GDP, regional economic anchors
- Spanish PyMEs 65% GDP, tourism/services employment driver
- Dutch SMEs 54% GDP, innovation-employment link
- Swedish small firms 60% GDP private sector, sustainable jobs
Economic Impact Interpretation
While small businesses may lack the towering prestige of corporate giants, their collective economic footprint is so vast and vital—from paying nearly half of America's private payroll to anchoring over half of global employment—that ignoring them would be like ignoring the foundation while marveling at the penthouse.
Employment Levels
- Small businesses with fewer than 500 employees accounted for 99.9% of all U.S. firms and employed 61.7 million people in 2022, representing 46.4% of private sector employment
- In 2023, U.S. small businesses employed 61.2 million workers, comprising nearly half of the private workforce
- Small firms (under 500 employees) provided 62.7% of net new jobs from 1993 to 2019 in the U.S.
- As of Q4 2022, there were 33.2 million small businesses in the U.S. employing about 60 million people
- Small businesses account for 44% of U.S. economic activity through employment and revenue combined
- In the U.S., 89.0% of small businesses have fewer than 20 employees, employing the majority of small business workers
- Small businesses employed 47.1% of the private workforce in the U.S. as of 2021 data updated in 2023
- Nonemployer small businesses numbered 28.4 million in 2022, but employer small firms employed 59.1 million
- Small businesses (1-499 employees) made up 99.7% of U.S. firms, employing 58.9 million in 2020
- In 2023, small business employment reached 61.7 million, up 2.3% from 2022
- U.S. small firms employed 12.4 million in manufacturing alone in 2022
- Small businesses provided jobs to 6.1 million veterans in the U.S. workforce in recent years
- In 2022, small businesses employed 55% of the U.S. workforce when including self-employed
- Employer small businesses totaled 6.3 million, employing 60.5 million people in 2023 estimates
- Small businesses account for 42.9% of jobs in high-tech sectors with 1.1 million high-tech firms
- In the EU, SMEs (small and medium enterprises) employed 66.8% of the private sector workforce in 2022
- UK small businesses (0-49 employees) employed 12.6 million people, 59% of private sector jobs in 2023
- Canadian small businesses employed 10.4 million people, 68% of private labour force in 2022
- Australian small businesses (<20 employees) employed 4.8 million, 68% of workforce in 2023
- Indian MSMEs employed over 110 million people in 2022
- Small businesses in Brazil (up to 19 employees) employed 22 million in formal sector 2022
- South African small businesses employed 60% of workforce, about 9 million jobs in 2023
- Mexican small businesses (<50 employees) employed 4.5 million formally in 2022
- Japanese small businesses (<300 employees) employed 70% of workforce, 38 million in 2023
- German SMEs employed 58% of workforce, 15.8 million in 2022
- French small firms (<50 employees) employed 7 million, 50% private jobs 2023
- Italian SMEs employed 82% of workforce, 11 million employees 2022
- Spanish small businesses (<50) employed 7.8 million, 65% total employment 2023
- Dutch SMEs employed 72% workforce, 4.2 million jobs 2022
- Swedish small firms (<50) employed 1.3 million, 60% private sector 2023
Employment Levels Interpretation
For all the talk of corporate giants, the global economy is really just a collection of very determined little shops, side hustles, and family firms that, when you add them up, are quietly responsible for employing about half of everyone, everywhere.
Industry Distribution
- U.S. small businesses in accommodation/food services employ 10.1 million workers (58% of sector)
- Small firms account for 79.9% of jobs in other services industry in U.S., employing 5.2 million
- In U.S. construction, small businesses employ 2.0 million workers (80.1% of sector employment)
- U.S. small businesses dominate administrative services with 84.5% employment share, 4.8 million jobs
- Retail trade small businesses employ 4.5 million (50.2% of sector) in U.S.
- In U.S. health care/social assistance, small firms employ 14.2 million (52.3%)
- U.S. small manufacturing businesses employ 5.8 million (47.5% of manufacturing jobs)
- Professional/scientific/technical services: small businesses employ 6.7 million (85.3%) in U.S.
- U.S. wholesale trade small firms employ 2.1 million (32.4% share)
- Arts/entertainment/recreation: small businesses 88.7% employment, 2.3 million jobs U.S.
- In EU, SMEs represent 99% of businesses, 85% employment in services sector
- UK small businesses 60% employment in wholesale/retail/construction/motor trades
- Canadian small businesses 70% in services, employing 7.3 million
- Australian small firms 75% in property/business services, 2.5 million jobs
- Indian MSMEs 45% in manufacturing, 30% services, employing 50 million
- Brazilian small businesses 50% in commerce/services, 12 million jobs
- South African SMMEs 60% services, 5.5 million employment
- Mexican PyMEs 70% services/commerce, 3.2 million formal jobs
- Japanese SMEs 55% manufacturing, 20 million jobs
- German SMEs 99% non-financial business economy, 60% manufacturing employment
- French small enterprises 80% services, 5.5 million jobs
- Italian SMEs 95% services/manufacturing, 9 million employment
- Spanish PyMEs 85% services, 6.5 million jobs
- Dutch small firms 70% trade/services, 3 million employment
- Swedish SMEs 75% services, 1 million jobs
Industry Distribution Interpretation
From the diner's cook to the corner shop's bookkeeper, small businesses are the invisible scaffolding holding up the world's economies, quietly employing the majority of workers in everything from constructing our homes to healing our bodies.
Job Growth
- From 2012 to 2022, U.S. small businesses added 17.2 million net new jobs, averaging 1.72 million per year
- Small businesses created 1.6 million jobs in 2022 alone in the U.S.
- Between 1995 and 2022, small firms generated 66% of net job growth in the U.S.
- U.S. small business employment grew by 3.1% in 2023, adding approximately 1.9 million jobs
- Post-pandemic, small businesses accounted for 62% of job recovery from 2020-2023 in U.S.
- From Q1 2020 to Q1 2023, small firms added back 80% of jobs lost during COVID
- Small businesses in the U.S. construction sector added 250,000 jobs in 2022
- U.S. small business health care employment grew by 4.5% in 2022, adding 400,000 jobs
- Over the last decade (2013-2023), small businesses created 12 million net new jobs in U.S.
- Small firms drove 75% of job growth in leisure and hospitality post-2021 recovery
- In 2023, U.S. small business payroll employment rose 2.4% year-over-year
- Small businesses accounted for 55% of new jobs in professional services from 2018-2022
- During 2021-2023, small firms net added 8 million jobs amid economic rebound
- U.S. small retail businesses grew employment by 1.8% in 2023, adding 150,000 positions
- Small manufacturing firms added 180,000 jobs in 2023 U.S.
- From 2000-2020, small businesses generated 70% of gross job creation in U.S.
- In EU, SMEs created 85% of new jobs between 2013-2022
- UK small businesses added 500,000 net jobs in 2022-2023 recovery
- Canadian small businesses grew employment by 3.2% in 2023, adding 350,000 jobs
- Australian micro-small businesses added 200,000 jobs in 2023
- Indian MSMEs created 4.5 million new jobs under schemes in 2022-23
- Brazilian small firms net job growth of 1.2 million in 2022 formal sector
- South African small businesses added 300,000 jobs via support programs 2023
- Mexican small enterprises employment up 2.5% in 2023, +250k jobs
- Japanese SMEs job growth 1.8% in 2023, adding 700,000 positions
- German SMEs net new jobs 400,000 in 2022 despite challenges
- French small business employment +2.1% in 2023, 150k new jobs
- Italian SMEs created 200,000 net jobs in 2023 recovery
- Spanish small firms added 300,000 jobs in 2023, 2.4% growth
- Dutch SMEs employment growth 2.7% in 2023, +100k jobs
- Swedish small businesses net +50,000 jobs in 2023
Job Growth Interpretation
While big corporations often steal the headlines, it's the relentless, job-creating hustle of small businesses worldwide that truly keeps the global economic engine humming and paychecks printing.
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