July 31, 2013

Microbusiness is a major job creation engine in California

Small companies in California have had a far greater impact on job creation than previously estimated, and this has been going on for an number of years. According to an analysis issued by Small Business California, businesses with less than five employees, sometimes called “microbusinesses”, were the state’s main engine of job growth between 2003 and 2010. These firms added 719,729 positions over that time period, while all other small businesses lost a combined 460,368 jobs during the same time frame.

California’s microbusinesses added jobs even during the depths of the recent recession, creating 120,818 positions between 2008 and 2010. Larger businesses, including firms with more than 500 workers, lost a combined 1.02 million jobs in those years. The report was based on an analysis of data from the U.S. Small Business Administration, Office of Advocacy and can be viewed at this link http://www.smallbusinesscalifornia.org/1.pdf

It is possible that the role of microbusiness has been far greater than previously estimated and this should provide some serious food for thought for economic development professionals and those responsible for business policy formation in California.

Filed under California Economy, Small Business by

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