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Small Business in South Carolina

This article explores the role of small business in the US economy, specifically in South Carolina. It highlights the number of small firms, their contribution to job growth, innovation, and their involvement in technology-based industries. The article also emphasizes the increased participation of small technology firms in federal funding programs.

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Small Business in South Carolina

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  1. Small Business in South Carolina Caron St. John, PhD Clemson University

  2. Purpose • Small business in the US economy • Small business in SC • Small business and innovation • Technology-based SC companies

  3. Small Business • Definition: U.S. government defines a small business as any company with fewer than 500 employees • There are 24.7 million businesses in the US • Of those, 5.7 million have employees; 18.6 million do not • Only 17,000 businesses in the US have more than 500 employees • 99.7% of all employer- firms are “small” • Small firms employ over 50% of the private sector workforce, pay 45 percent of total private payroll.

  4. Firms in the United States

  5. Small Business in South Carolina… • Number of firms that employ others increased from 70,600 in 1990 to 91,000 in 2003 • In 2002-2003, SC ranked 13th in the nation on growth in number of employer-firms • In 2002-2003, SC ranked 24th nationwide in rate of new employer-firm formation, 39th in terminations. • In 2002-2003, self-employment grew from 108,000 to 120,000, which ranks 11th in the nation. Source: US SBA: Small Business Economic Indicators, 2003

  6. Firms and Employment in South Carolina (By Employment Size of Firm) Total 0-19 <500 500+ Firms 77,996 66,900 75,789 2,207 Employees 1,596,385 264,144 745,967 850,418

  7. Number of SC Firms, by Size

  8. New firms and job growth… Between 1990 and 2000, the U.S. economy created approximately 15 million new jobs. • Over 1/3 were created by ~ 6.4 millionnew firms formed during those same years. • Together, on average, year after year, new and expanding small firms accounted for over 75% of all new job creation in the country. In 2000-2001, small business created ALL net new jobs: 1.1 million. Large employers had net job loss of over 150,000. Sources: Small Business Economic Indicators 2000, U.S. Small Business Administration Office of Advocacy, 2001: Global Entrepreneurship Monitor, 2000

  9. Small Firms and Innovation

  10. Innovation and small firms Small technical firms, on average: • Produce 13-14 times more patents per employee than large patenting firms • Patent more technically significant inventions than larger firms, • These patents are twice as likely as large firm patents to be among the 1% most cited. • Participate in innovations that are more leading edge – early stage • Play an essential role in advancing new technologies in the economy Source: CHI Research Inc. , (February, 2003) “Small Serial Innovators: The Small Firm Contribution to Technical Change.” Small Business Administration Office of Advocacy

  11. Lead in bringing innovations to market… • Small entrepreneurial ventures responsible for • more than 67% of inventions and • 95% of all radical innovations ..since WWII • Examples – Air conditioning, airplane, artificial skin, frozen foods, heart valve, heat sensor, helicopter, hydraulic brake, personal computer, safety razor, soft contact lens….

  12. Technology Companies in South Carolina -- 2005 Corptech Directory of High Technology Companies, 2005

  13. SBIR and STTR Awards 97 98 99 00 01 02 SBIR Awards 8 10 8 19 20 25 Dollars 1.3 1.2 1.7 3.8 4.8 6.2 Rank 45 37 42 35 30 32 STTR Awards 3 4 Dollars .8 .8 Rank 20 26

  14. SBIR Awards in South Carolina

  15. Summary • Small firms critical to growth and innovation in the economy • SC has strong record of new firm creation and small business growth • Firms in key technology areas • Increased participation by small technology firms in federal funding programs

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