> ## Content Index
> Fetch the complete content index at: https://www.philmckinney.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Small Businesses Will Be Key For The Economic Recovery
- URL: https://www.philmckinney.com/small-businesses-will-be-key-for-the-economic-recovery/
- Published: 2008-10-22T06:04:34.000Z
- Updated: 2016-06-11T03:33:08.000Z
- Description: I’m an eternal optimist when it comes to the ability of people to create innovations – especially when we find ourselves at our greatest need. This drive to solve problems is a prime catalyst for entrepreneurs who are the ones behind small businesses. So are entrepreneurs better at innovating than
- Author: Phil McKinney
- Tags: Blog, Case Studies, Leadership, CHI, economic recovery, patents, SBA, small business, small businesses, SMB, #wp, #wp-post, #philmckinneycom, #Import 2023-05-01 05:17

I'm an eternal optimist when it comes to the ability of people to create innovations – especially when we find ourselves at our greatest need. This drive to solve problems is a prime catalyst for entrepreneurs who are the ones behind small businesses.

So are entrepreneurs better at innovating than large enterprises with all of their resources?

In simple terms …. yes!

A [Chi Research report](http://www.sba.gov/advo/research/rs225tot.pdf?ref=philmckinney.com) prepared for the Small Business Administration (SBA) highlights the innovation output from small businesses. Specifically:

- Small firms produce more highly cited patents than large firms on average. Small firm patents are twice as likely as large firm patents to be among the 1% most cited patents. That is, small firm patents are on average more technically important than large firm patents.
- Small patenting firms produce 13-14 times more patents per employee as large firms.
- Small firm innovation is more extensively linked to outside technology while large firms build more on their own technology.

> Small businesses patents are twice as likely as those from large firm to be among the 1% most cited.  
>  
> Phil McKinney

This is confirmed by examining the patents with the highest citation indices. Small firms account for 6% of the patents issued to the 1,071 most innovative firms. But when these patents are ranked by citation index, we find that small firms account for:

- 8% of the top 10%,
- 9% of the top 5%,
- 14% of the top 1%.

Thus, a patent from a small firm is more than twice as likely to be found among the top 1% highest impact patents than is a patent from a large firm.

In addition to the ability of small businesses to generate innovations, they also are the leading creator of jobs. According to a recent report released by the Office of Advocacy of the U.S. Small Business Administration (SBA), small businesses created 1.9 million jobs in 2004, – the most recent year for which job creation was studied.

Other notable statistics from the report include:

- In 2006, the nation had an estimated 26.8 million small businesses, of which 6.1 million were employer firms which means 20 million small businesses in the country have no employees (self-employed).
- Small businesses employed 50.9 percent of the nation’s non-farm private workforce in 2004.
- Women-owned firms totaled 6.5 million and generated $940.8 billion in revenues in 2002 (latest data).

Go small businesses!! We are depending on you to be a key catalyst for the economic recovery.

**Note:* I know that this is clearly a US centric view. I would welcome comments from non-US readers and how this view does or does not apply to their country/region.*

Source: [SBA Research Report](http://www.sba.gov/advo/research/rs225tot.pdf?ref=philmckinney.com)