Small Firms Create All Net New Jobs in Pennsylvania, Study Shows

Small Firms Create All Net New Jobs in Pennsylvania, Study Shows

Small Business Development Centers Note Healthy Small Firms Point to Economic Recovery

PHILADELPHIA—The latest numbers released by the US Small Business Administration’s Office of Advocacy reveal just how important small businesses will be to Pennsylvania’s economic recovery. When it comes to job creation, small businesses matter—big time.

Figures compiled from the U.S. Department of Commerce and Bureau of the Census in the Small Business Profiles for the States and Territories offer compelling evidence: Small firms created all of the net new jobs in Pennsylvania from 2004 to 2005, the most recent data available. By comparison, firms with more than 500 employees in the state reported 40,994 jobs lost during that same period.

With the national unemployment rate at its highest level in 26 years and expected to climb, small firms offer hope as the traditional engines of job creation.

“This study underscores what we have consistently seen with the companies that come to the SBDC,” remarks Christian Conroy, state director of the Pennsylvania Small Business Development Centers (SBDC). “Even in past recessions, small companies created jobs.  In 2002, for example, SBDC clients created more than 7,900 new jobs.  I am sure it will once again be the innovative small business sector that pulls us out of this recession and returns the Commonwealth to growth and prosperity.”

Such growth is already happening. Reclamere, a leading provider of data destruction, recovery and security management services in Tyrone, Pa. has grown with help from the Saint Francis University SBDC.  The company is expanding its staff by 10 percent in 2009, adding four new positions to its 40-person operation. Moore Aviation, a flight school in Beaver Falls, Pa., offers another promising example. A $10 million loan secured with help from the University of Pittsburgh SBDC enabled the business to act on its expansion plans and hire 12 new pilots and 14 new ground service and maintenance workers. 

“There are 239,000 small firms in the commonwealth that employ more than half of the Pennsylvania workforce,” said George Cornelius, acting Secretary for the Pennsylvania Department of Community and Economic Development.  “As the largest provider of entrepreneurial services, Governor Rendell and DCED consider the SBDC program to be a vital part of the commonwealth’s strategy to spark business growth, job creation, and job retention.”

Annually, Pennsylvania SBDC clients add thousands of jobs: Independent research shows the SBDC program created 7,033 in the past year alone. Through other business assistance services, the SBDC also helps companies to remain viable and profitable, retaining thousands of existing jobs.

“This has a positive multiplier effect,” notes Conroy.  “When businesses are profitable, they retain staff, benefiting workers who are supporting families and reducing the need for costly state-supported social services.  Firms that retain employees can save an average of $5,400 per unemployed worker, for instance. That can add up substantially. ”

In Pennsylvania, small firms represent 98.4 percent of the state’s employers.  The country overall has slightly more than 6 million small employers, or 99.7 percent of all employer firms. Firms with more than 500 employees are very few in number—only about 18,000. Nationally, small businesses created 78.9 percent of the nation’s net new jobs, according to the most recent data available.  

About the Pennsylvania SBDC

Since its inception in 1980, the Pennsylvania Small Business Development Centers (SBDC) has evolved into a network of 18 university-based centers and more than 100 outreach locations, operating under the guidance of the State Director located at the University of Pennsylvania. Funding support from the Commonwealth of Pennsylvania, the U.S. Small Business Administration and the SBDC host institutions enables consulting services to be provided at no charge to the client. For more information on the Pennsylvania Small Business Development Centers’ services and impact, visit www.pasbdc.org.

Related

US Small Business Administration Office of Advocacy- Small Business Profiles for the States and Territories (Pennsylvania)

US Department of Labor – Employment Situation Summary

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