Annual Report of the

Office of Economic 

Research

FY 2017
Page | 2 Annual Report of the Office of Economic Research, FY 2017

Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration is an 

independent voice for small business within the federal government. Appointed by the President and 

confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel 

advances the views, concerns, and interests of small business before Congress, the White House, federal 

agencies, federal courts, and state policymakers. Economic research, policy analyses, and small business 

outreach help identify issues of concern. Regional Advocates and an office in Washington, D.C., support 

the Chief Counsel’s efforts.

Advocacy’s primary functions include small business research. Advocacy’s founding legislation, Public 

Law 94-305, directs the office to

examine the role of small business in the American economy and the contribution 

which small business can make in improving competition, encouraging economic and 

social mobility for all citizens, restraining inflation, spurring production, expanding 

employment opportunities, increasing productivity, promoting exports, stimulating 

innovation and entrepreneurship, and providing an avenue through which new and 

untested products and services can be brought to the marketplace. . .

To learn more about the Office of Advocacy, visit https://advocacy.sba.gov or call 202-205-6533. To 

receive email notices of the office’s latest research and news, visit 

https://www.sba.gov/content/connect-us-0.
Annual Report of the Office of Economic Research, FY 2017 Page | 3

Table of Contents

Foreword..........................................................................................................................................4

Introduction .....................................................................................................................................5

Advocacy Research Reports, FY 2017..........................................................................................7

Access to Capital..........................................................................................................................7

Employment ................................................................................................................................8

Entrepreneurship.........................................................................................................................8

General Small Business................................................................................................................9

Regulation..................................................................................................................................10

Women’s Business Ownership ..................................................................................................10

Veterans ....................................................................................................................................12

Small Business Economic Research Forums...................................................................................13

Data Access....................................................................................................................................16

Small Business Data Resources .................................................................................................16

Downloadable Firm Size Data....................................................................................................16

Statistics of U.S. Businesses.......................................................................................................17

Business Dynamics Statistics.....................................................................................................17

Business Employment Dynamics...............................................................................................17

Non-Employer Statistics............................................................................................................18

County Business Patterns..........................................................................................................18

Survey of Business Owners (SBO)..............................................................................................18

Annual Survey of Entrepreneurs (ASE)......................................................................................19

Call Report and Community Reinvestment Act Data ................................................................19

Other Small Business Data Sources...........................................................................................19

Conclusion......................................................................................................................................21

Appendixes.....................................................................................................................................22

Appendix A: United States Small Business Profile

Appendix B: Dissecting Access to Capital

Appendix C: The Role of Microbusinesses Employers in the Economy
Page | 4 Annual Report of the Office of Economic Research, FY 2017

Foreword 

For more than four decades, the Office of Economic Research (OER) has supported the Office of 

Advocacy’s mission by producing small business research and statistics. OER continues to answer the 

call to Public Law 94-305, which gave Advocacy the special task of examining “the role of small business 

in the American economy.” Through several channels such as economic research studies, issue briefs, 

fact sheets, conferences, and forums, OER provides policymaking insights into small business issues and 

increases the understanding of the small business economic climate. 

In fiscal year 2017, OER produced and disseminated 20 research reports to the public. It also continued 

work with the U.S. Census Bureau to make data and statistics on small business more accessible to the 

public and policymakers. 

OER also convened six research dialogues through its speaker series the “Small Business Economic 

Research Forum,” which gave economists and researchers an opportunity to present relevant and timely 

small business issues. The small business community, which included small business stakeholders, 

policymakers, and researchers, came together to exchange ideas about economics, small business, and 

policy. These discussions also inform Advocacy’s staff and research agenda of the cutting-edge issues 

that are affecting small businesses. 

In 2017, a renewed effort was launched to reach out to small businesses to receive input on regulatory 

reform. OER participated in 11 of Advocacy’s Regional Regulatory Reform Roundtables and numerous 

small business site visits throughout the nation in order to assist the office’s effort in gathering small 

business input to give to federal agencies for regulatory reform under Executive Orders 13771 and

13777. These events were an opportunity to inform and educate the small business community on how 

Advocacy’s research can be a tool in creating better policies for small businesses.

OER was also active in Advocacy’s effort to facilitate greater consideration of small business issues 

during international trade negotiations. OER economists assisted in analyzing the contributions and 

challenges of small businesses involved in international trade for the NAFTA modernization. 

Additionally, OER economists gave 28 presentations on small business research in FY17, and, along with 

Advocacy’s attorneys, provided Regulatory Flexibility Act training for nearly 200 federal officials, and

helped achieve regulatory cost savings for small businesses in the regulatory development process by 

emphasizing sound economic analysis. 

Major L. Clark, III Patrick Delehanty

Acting Chief Counsel for Advocacy Acting Director of Economic Research
Annual Report of the Office of Economic Research, FY 2017 Page | 5

Introduction

The Office of Advocacy of the U.S. Small Business Administration (SBA) directs its Office of Economic 

Research (OER) to advance Advocacy’s core mandate “to examine the role of small business in the 

American economy and the contribution which small business can make in improving competition, 

encouraging economic and social mobility.”1

This annual report lists OER’s Fiscal Year 2017 research publications, small business economic research 

forums held, and an overview of the most widely used publicly available data series on small businesses. 

During FY 2017 (October 1, 2016, to September 30, 2017), OER participated in numerous roundtables 

and conferences, and produced timely and relevant small business research illuminating the economic 

landscape for small businesses. To meet the needs of small business stakeholders, OER highlighted the 

contributions and challenges of small businesses in the following topics:

• Access to Capital

• Employment

• Entrepreneurship

• Regulations

• Women’s Business Ownership

• Veterans’ Business Ownership

In FY 2017, OER emphasized reproducible research and data visualization to make complex information 

digestible, accessible, and transparent as illustrated in the following research products:

“Small Business State Profiles” (see Appendix A), Dissecting Access to Capital (Appendix B), and The Role 

of Microbusiness Employers in the Economy (Appendix C). Additionally, OER resumed providing the 

Small Business Quarterly Bulletin, combining it with the previous publication, Quarterly Lending Bulletin, 

and published research products that ranged from economic studies, issue briefs, and fact sheets.

Along with in-house research, OER periodically funds contracts on small business research from experts 

in the field. OER’s research contract program provides an avenue to leverage specific expertise and 

capabilities from top small business researchers. For more information on research funding 

opportunities, go to Advocacy’s website or Federal Business Opportunities (www.FBO.gov). 

While Advocacy is not a statistical data collection agency, OER partners with the U.S. Census Bureau to 

sponsor the production and dissemination of data on small businesses by industry, business size, and 

geographic area. This data is used by federal agencies during policy development to inform decisions 

that affect small businesses. It is also used by OER and the research community to examine small 

 

1 Public Law 94-305, 1976.
Page | 6 Annual Report of the Office of Economic Research, FY 2017

business issues. OER provides this data in downloadable files, along with its research and statistics on 

small businesses, on its website at www.sba.gov/advocacy. 
Annual Report of the Office of Economic Research, FY 2017 Page | 7

Advocacy Research Reports, FY 2017 

This report records all publications produced by the Office of Economic Research for FY 2017. All of the 

research products listed can be found on Advocacy’s website. The publications are listed by subject with 

the newest items first.

Access to Capital

Interest Rates and Non-Bank Lending To Small Businesses

Author: Office of Economic Research 

Released: August 2017

Description: This installment of the Alternative Finance Series provides an overview of non-bank 

lending for small business capital needs. 

Small Business Quarterly Bulletin

Author: Office of Economic Research

Released: August 2017

Description: This quarterly bulletin provides an update on the health of the small business sector 

with the latest available data through charts on self-employment, job creation, new 

business creation, and small business finance. 

Dissecting Access to Capital

Author: Michael McManus, Advocacy Economist

Released: August 2017

Description: This fact sheet provides answers to questions on the source, amount, and financing 

options of startup capital that is available to employer firms based on the new 2015 

Annual Survey of Entrepreneurs produced by the U.S. Census Bureau.

Small Business Lending in the United States 2014-2015

Author: Victoria Williams, Advocacy Economist

Released: June 2017

Description: This report provides information on developments in the small business credit markets. 

It captures information on the online lending market, and provides detailed information 

on traditional bank lending activities to small businesses. The report uses the 

Consolidated Reports of Condition and Income (Call Reports) and the Community 

Reinvestment Act (CRA) reports to analyze the loan activities of lenders geographically. 
Page | 8 Annual Report of the Office of Economic Research, FY 2017

Employment

The Role of Microbusiness Employers in the Economy

Author: Brian Headd, Advocacy Economist

Released: August 2017

Description: This fact sheet outlines the role microbusiness employers, firms with fewer than 10 

employees, play in employment and job creation.

Small Business Job Creation Deconstructed

Author: Office of Economic Research

Released: August 2017

Description: This fact sheet provides information on job creation, small business shares, and types of 

small businesses, new business creation, and business owner demographics. 

Entrepreneurship

Entrepreneurship in Low Income Areas

Author: Maurice Kugler, Marios Michaelides, Neha Nanda, and Cassandra Agbayan

Released: September 2017

Description: This study describes entrepreneurship in low-income areas. It focuses on three things: 

the characteristics of self-employed workers in low-income areas, the income sources of 

these workers, and the characteristics of businesses operating in low-income areas. 

The Retreat of the Rural Entrepreneur

Author: Daniel Wilmoth, Advocacy Economist

Released: September 2017

Description: In 1988, more than a fourth of the self-employed lived in rural areas. By 2016, that 

share had fallen to less than 1 in 6. This report shows that the decline was caused by 

a population shift away from rural areas and a fall in the rural rate of selfemployment. Between 1988 and 2016, the rural rate of self-employment fell by over 20 

percent. Despite that decline, the rate of self-employment has remained higher in rural 

areas than in other areas. 

Explaining the Emergence of the Immigrant Entrepreneur

Author: Daniel Wilmoth, Advocacy Economist

Released: January 2017

Description: This is the fourth in a series of reports on trends in entrepreneurship by the Office of 

Advocacy. This report found an explanation for the growth in the number of immigrant 

entrepreneurs. Put simply, age is related to self-employment, and immigrants are 

getting older. In addition, as the native-born Baby Boomers age and retire, the number 

of self-employed will decline.
Annual Report of the Office of Economic Research, FY 2017 Page | 9

The Arrival of the Immigrant Entrepreneur

Author: Daniel Wilmoth, Advocacy Economist

Released: October 2016

Description: This is the third in a series of reports on trends in entrepreneurship. Over the last 20 

years, the role of immigrant entrepreneurs has grown. The percentage of the selfemployed who were born abroad more than doubled between 1994 and 2015, growing 

from 8.6 percent to 19.5 percent. This report shows that the growth was caused by 

three changes—an increase in the size of the population born abroad, an increase in 

self-employment among those born abroad, and a decrease in self-employment overall.

General Small Business

Frequently Asked Questions about Small Business

Author: Office of Economic Research

Released: August 2017

Description: This annual, widely used publication gathers dozens of the latest statistics about 

America’s small business in one place including the total number of small businesses, 

their share of employment and net new jobs, business owner demographics, and trends 

in business dynamism.

Infographic: What's New with Small Business?

Author: Office of Economic Research

Released: August 2017

Description: This infographic depicts key points from the Small Business FAQ – including number and 

percent of small businesses, job creation, and business owner demographics. 
Page | 10 Annual Report of the Office of Economic Research, FY 2017

3 Reasons to Love Your Region

Author: Office of Economic Research

Released: September 2017

Description: This set of 10 regional infographics provides selected regional facts on any of the 

following: economic growth, entrepreneurial spirit, innovation, international movers, 

and fun fact for the region. 

Annual Report of the Office of Economic Research, FY 2016

Author: Office of Economic Research

Released: January 2017

Description: This report details 26 OER publications and eight Small Business Economic Research 

Forums that were produced during fiscal year 2016, October 1, 2015, through 

September 30, 2016. That year, OER produced research on the following topics: access 

to capital, employment, innovation, minority- and women-owned businesses, and 

veteran-owned businesses. 

2017 State Small Business Profiles

Author: Office of Economic Research 

Released: January 2017

Description: These user-friendly data-rich profiles capture vital information on the U.S. and statelevel economic growth, industry, and jobs using completely reproducible data from the 

leading government statistical agencies. The set contains individual reports on the 

United States, the 50 states, the District of Columbia, and five U.S. territories.

Regulation

How to Comply with the Regulatory Flexibility Act: A Guide for Government Agencies: Small Business 

Data Appendix

Author: Office of Economic Research

Released: August 2017

Description: This appendix supplements the Office of Advocacy’s Guide to RFA Compliance with an 

overview of the small business data publicly available for analyzing the regulatory 

impacts on small businesses. 

Women’s Business Ownership

Get the Facts on Women Business Owners

Author: Michael McManus, Advocacy Economist

Released: July 2017

Description: This guest blog post by an Advocacy economist was published on the U.S. Department 

of Labor’s blog. It documents the importance of women-owned businesses in the U.S. 

economy, and highlights key findings and characteristics of women business owners in 

Census Bureau’s 2012 Survey of Business Owners. 
Annual Report of the Office of Economic Research, FY 2017 Page | 11

Infographic: Women-Owned Business Spotlight

Author: Office of Economic Research

Released: August 2017

Description: This infographic visualizes key statistics on women-owned businesses including industry 

sectors, age of business, sales, and women’s share of minority businesses. 

Women’s Business Ownership: Data from the 2012 Survey of Business Owners (Issue Brief 13)

Author: Michael McManus, Advocacy Economist

Released: May 2017

Description: This issue brief shows the major economic contribution of women-owned businesses, in 

spite of their average smaller size when compared to male-owned firms. This new 

research takes a closer look at important factors regarding the longstanding differences 

between male- and women-owned firms’ sales and employment. Among other items, 

the report evaluates the industry distribution and business characteristics, like age and 

financing, of women-owned businesses. Featuring interactive charts, users can now 

easily understand the gender composition and performance of women-owned 

businesses in hundreds of industries. The report uses the most recent Census Bureau 

2012 Survey of Business Owners data to create a highly detailed portrait of this group, 

including their role in minority business communities. 
Page | 12 Annual Report of the Office of Economic Research, FY 2017

Veterans

Veteran-Owned Businesses and Their Owners

Author: Joseph Sobota, Assistant Advocate

Released: April 2017

Description: The report gives a detailed profile of this robust business population based on the latest 

available data, the U.S. Census Bureau’s 2012 Survey of Small Business Owners. The 

report uses data from the U.S. Census Bureau’s Survey of Business Owners. It is one of 

the only large-scale compilations of data on veteran-owned businesses in the United 

States, and it provides valuable data for analytical and policymaking. 
Annual Report of the Office of Economic Research, FY 2017 Page | 13

Small Business Economic Research Forums

In FY 2017, the Office of Economic Research hosted six Small Business Economic Research Forums. 

Experts were invited to discuss a key economic topic on current or emerging issues affecting the small 

business landscape. These forums are useful in keeping Advocacy’s staff abreast of recent research and 

data from other agencies and researchers. A list of the forums held in this fiscal year follows, with the 

most recent appearing first.

Cash is King: Flows, Balances, and Buffer Days; and 

The Ups and Downs of Small Business Employment

Speaker: Chris Wheat, Director of Business Research, JPMorgan Chase Institute

Date: July 12, 2017

Description: Wheat presented two topics. The first presentation focuses on a sample of 597,000 

small businesses, and 470 million anonymized transactions to produce a daily view of 

cash inflows, cash outflows, and end-of-day balances from February 2015 to October 

2015. The second presentation focuses on small business employment using a sample 

of 45,260 small businesses that hold Chase Business Banking deposit accounts and meet 

criteria for small, core metropolitan employer businesses. 

Commodity Shocks, Firm-level Responses and Labor Market Dynamics

Speakers: Felipe Saffie and Sergio Urzua, Assistant Professors, University of Maryland

Date: June 14, 2017

Description: This paper studies the role of labor markets in the transmission of commodity price 

super cycles. The authors study the case of Brazil between 1999 and 2013, a period in 

which large commodity price fluctuations provided a clean quasi-natural experiment. 

They use linked employer-employee data to build regional commodity prices and 

regional sectoral employment and wages. The empirical evidence shows that regional 

skill premium decreases during a commodity boom. Interestingly, the skill premium 

does not decrease during the bust, pointing to downward rigidities in wages. Moreover, 

they document extensive cross sectoral spillovers. In fact, employment in the nontradable and commodity sector expands while tradable non commodity employment 

decreases. There is a similar pattern in the net entry of business and firm level 

employment. They build a three-sector model of a small open economy with firm 

heterogeneity, entry and exit decisions, and skilled and unskilled labor to explain this 

novel transmission mechanism. They show that during the boom, the commodity and 

non-tradable sectors expand, the skill wage premium narrows, and the non-commodity 

export sector contracts. During the bust, on the other hand, downward wage rigidity 

generates dynamic misallocation between sectors, triggering a persistent recession 
Page | 14 Annual Report of the Office of Economic Research, FY 2017

characterized by unemployment and a sluggish recovery of non-commodity exporters. 

This opens a door for precautionary policy during the boom.

Using Small Business Data to Improve Regulatory Analysis

Speakers: Jonathan Porat, Regulatory Economist, SBA Office of Advocacy

Richard Schwinn, Research Economist, SBA Office of Advocacy

Date: May 18, 2017

Description: Porat and Schwinn introduce a new data visualization tool for analyzing the effects of 

potential regulations on small businesses. Using the data visualization software,

Tableau, and Census Bureau’s data series Statistics of U.S. Businesses, Porat and 

Schwinn demonstrate a tool to access and visualize important elements in regulatory 

analysis, for instance the number and percent of small businesses by industry, and 

revenues of firms of different sizes. Additionally, they discuss how advances in statistics 

and data visualization can be used to improve the regulatory review process.

Still the Same: New Venture Job Creation and Workforce Segregation

Speaker: Chris Rider, Associate Professor of Strategy, 

McDonough School of Business, Georgetown University

Date: April 12, 2017

Description: Rider proposes that new ventures create jobs but also accentuate workforce 

segregation because demographically-similar people typically found and then shape the 

evolution of new organizations. Focusing specifically on the tendency of new venture 

personnel to have worked for the same prior employer (e.g., spinoffs), Rider’s team

analyzes the evolution of 280 Danish municipalities’ workforces and two national 

cohorts of new ventures from 1996 to 2008. Several findings support their arguments. 

First, the gender and ethnic segregation of a community’s workforce increases with the 

proportion of local workers employed by new ventures. Second, new ventures are less 

demographically diverse than established organizations; this is especially true of new 

ventures staffed by personnel who worked for few prior employers. Third, new ventures 

tend to maintain demographic homogeneity through differential retention, as opposed 

to differential hiring. The findings have implications for entrepreneurship research as 

well as public policies that promote entrepreneurship to create jobs.

Entrepreneurship Prospects for Disadvantaged Populations: Existing Evidence and Future Research 

Agenda

Speaker: Maurice Kugler

Date: November 9, 2016

Description: This recent study aims to close research gaps on entrepreneurship in low-income areas. 

The paper examines the characteristics and income sources of self-employed workers in 

low-income areas, as well as the characteristics of businesses operating in low-income 
Annual Report of the Office of Economic Research, FY 2017 Page | 15

areas. The analyses rely on survey and administrative data that provide information on 

the characteristics of self-employed workers and businesses operating in the United 

States in 2013. The author also places the findings in context using his company’s past 

research evaluating entrepreneurship programs for disadvantaged populations. Finally, 

he discusses remaining open questions and how a future research agenda could be 

shaped to furnish evidence instrumental for the design of programs that enhance 

entrepreneurship opportunities.

Global Ignition: Connecting U.S. Technology Startups to the Next 2 Billion Customers

Speaker: Cary Ingram, Senior International Trade Specialist 

International Trade Administration, U.S. Department of Commerce

Date: October 12, 2016

Description: Over the past 2-3 years, the U.S. Department of Commerce, International Trade 

Administration (ITA) set out to determine what the U.S. government can do to improve 

export and market development assistance to tech startup companies and innovative 

entrepreneurs. ITA is an agency that specializes in providing support and assistance to 

U.S. companies seeking to expand into international markets. However, it was 

discovered that ITA may not be effectively reaching startups entrepreneurs with current 

product and service models. Technology startup companies are engines of economic 

growth, innovation, and job creation in the U.S. economy, and is a client base that ITA 

could not afford to continue missing. 

Global Ignition: A Strategic Primer on Accelerating Startups to International Markets

tells the story of ITA’s efforts achieve the goal of connecting startup companies to the 

next 2 billion customers. The culmination of over two years of extensive research and 

engagement with stakeholders throughout the United States, Global Ignition examines 

institutional information gaps, describes some of the key challenges and barriers for 

startups in international markets, and provides a high-level framework for promoting 

the export potential, or global-readiness, of startup tech companies at earlier stages of 

development than ITA assistance models currently envisage.
Page | 16 Annual Report of the Office of Economic Research, FY 2017

Data Access

While Advocacy is not a data collection agency, in FY 2017 it continued to organize downloadable data 

related to small businesses and provide links to data on its website. Businesses with and without 

employees — employer and non-employer firms — are covered in the data. A large percentage of small 

businesses are non-employer firms; but employer firms contain a larger share of the receipts and 

payroll. The majority of employer firms are small firms, but for comparison purposes, data are also 

provided on large firms. The Office of Advocacy defines a small business for research purposes as an 

independent business having fewer than 500 employees.

In addition, banking data for small businesses is also compiled by the Office of Advocacy. While the 

employment size of a firm is often used to define a small business, the banking data uses loan size. 

Business loans of $1 million or less is defined as a small business loan in the banking data as opposed to 

the size of the firm. 

All of these data are provided in a user-friendly format that allows researchers, policymakers, small 

business trade associations, small businesses, and members of the media interested in small businesses 

to obtain the data to investigate the role and status of small firms in the economy. 

Small Business Data Resources

Advocacy offers a list of hyperlinked Small Business Data Resources that is useful for small business 

researchers and policy makers. This valuable research tool lists small business databases by both federal 

agencies and the private sector with links to their websites. This information contains key topics, which 

include demographics, employment, exports, finance, firm size data, health care, taxes, pension 

coverage, and training.

The list captures many of the most widely used data resources, but Advocacy notes that inclusion of any 

specific database on the list does not constitute an endorsement by the Office of Advocacy or the Small 

Business Administration.

Downloadable Firm Size Data

Advocacy defines a small business as an independent business having fewer than 500 employees for 

research purposes, and posts firm size data from a number of sources on its website. Firm size data for 

employer firms are from the Statistics of U.S. Businesses (SUSB), Business Dynamics Statistics (BDS), and 

Business Employment Dynamics (BED) programs. Non-employer data are available from the NonEmployer Statistics (NES) program. These data are provided annually from the U.S. Census Bureau, 

except for the Business Employment Dynamics, which is quarterly from the U.S. Department of Labor, 

Bureau of Labor Statistics. BDS and BED also have an age component providing data on small businesses 

by their years in business. All of the data programs are essentially based on the universe of privatesector businesses. 
Annual Report of the Office of Economic Research, FY 2017 Page | 17

Detailed data on owner and business characteristics are available from the U.S. Census Bureau’s Survey 

of Business Owners (SBO) in years ending in 2 or 7. The SBO, which is part of the Economic Census, 

provides data and a microdata set for activity in 2007. To supplement the SBO data in the other years, 

the Annual Survey of Entrepreneurs (ASE) conducted by the Census Bureau provides similar information 

to the SBO. 

Statistics of U.S. Businesses

Annually, the Office of Advocacy partially funds the Statistics of U.S. Businesses (SUSB) program— an 

employer firm size database produced by the U.S. Census Bureau. A firm is defined as an aggregation of 

all establishments owned by a parent company (within a geographic location and/or industry) with some 

annual payroll.

The SUSB’s employer data include the number of firms, number of establishments, employment, and 

annual payroll for employment firm size categories by location and industry. In addition to firm size 

data, receipt data and size categories are available, but only in years ending in 2 or 7. 

The data also consist of static and dynamic data. Static data provide a “snapshot” of firms at a point in 

time, while dynamic data follow firms from year to year and report job creation and destruction as well 

as business births and deaths. Much of the data is listed in time series format with some data available 

as far back as 1988, but the latest data available lags a few years. 

Detail industry information is available at the NAICS 6-digit level, meaning that data is available for over 

1,000 industries. Geographic data for some of the data items is also available at the county and 

metropolitan statistical area level, but data this detailed tends to be aggregated to a relatively high 

industry level.

Business Dynamics Statistics

Business Dynamics Statistics (BDS) provides another source of employer firm data, but by the age of the 

firm.2 BDS contains annual data for states, major industry, and some metropolitan statistical area data. 

Census provides a plethora of historical data for BDS with data going back to 1977, but the most current 

data lags a few years. BDS provides the number of firms, establishments, and employment, along with 

some dynamics, so firm and job creation can be analyzed. 

Business Employment Dynamics 

The Business Employment Dynamics (BED) employer database is a Bureau of Labor Statistic program 

that provides quarterly data with a focus on employment changes from establishment entry, growth, 

 

2

See the background paper, Business Formation and Dynamics by Business Age: Results from the New Business Dynamics 

Statistics, by John Haltiwanger, Ron Jarmin, and Javier Miranda for information on the data program, 

ces.census.gov/docs/bds/bds_paper_CAED_may2008_dec2.pdf.
Page | 18 Annual Report of the Office of Economic Research, FY 2017

decline, and exit. BLS presents the data in two ways to capture the seasonal firms by listing 

establishment openings—establishments that did not exist in the previous quarter—and establishment 

births—establishments that did not exist in the previous year. Classifications are similar for closings and 

deaths. Some employment data are by firm size such as job creation and destruction, but much of BED is 

establishment-based and does not contain an establishment or firm size component. These quarterly 

data date from 1992.3

 

Non-Employer Statistics

The Census Bureau provides non-employer data, which contains information on the number of nonemployer firms and receipts by state, metropolitan statistical area, and county with industry detail. A 

non-employer firm is defined as one that has no paid employees, has annual business receipts of $1,000 

or more ($1 or more in the construction industries), and is subject to federal income taxes. Nonemployers account for about three percent of business receipts, and about three quarters of all 

businesses. Note that non-employer businesses can have more than one owner and are a business. 

Thus, referring to the non-employer data as self-employed data (which is the occupation of someone) is 

not entirely accurate.

In the recent years, the U.S. Census Bureau has begun using noise infusion for disclosure avoidance for 

non-employer and SUSB data. This allows the agency to provide more data instead of merely providing a 

disclosed code for a data cell.

County Business Patterns

This annual data series comes from the Census Bureau. The CBP provides data on establishments, 

employment, first quarter payroll, and annual payroll at the county level. It also contains geography and 

industry level by establishment size.

Survey of Business Owners (SBO)

The Survey of Business Owners (SBO) is the only comprehensive source of information that provides 

certain economic and demographic characteristics for businesses and their business owners by gender, 

ethnicity, race, and veteran status. Detailed data on owner and business characteristics are available 

from the U.S. Census Bureau’s Survey of Business Owners (SBO) every five years, in years ending in 2 or 

7. The SBO, which is part of the Economic Census, also provides data and a microdata set for activity in 

2007. Data includes sales and receipts, annual payroll, and employment. Data aggregates are presented 

by gender, ethnicity, race, and veteran status for the United States by 2012 North American Industry 

Classification System (NAICS), states, metropolitan and micropolitan statistical areas, counties, places, 

and employment and receipts size.

 

3

See the background paper Measuring Job and Establishment Flows with BLS Longitudinal Microdata by Timothy Pivetz, Michael 

Searson, and James Spletzer for information about the data program, bls.gov/opub/mlr/2001/04/art2full.pdf.
Annual Report of the Office of Economic Research, FY 2017 Page | 19

Annual Survey of Entrepreneurs (ASE)

The Annual Survey of Entrepreneurs (ASE) is a new yearly survey conduct by the Census Bureau to 

supplement SBO data. Similarly to the SBO, the ASE provides information on the demographic 

characteristics for businesses and their owners. Included are all nonfarm businesses filing Internal 

Revenue Service tax forms under all types of business organization with receipts of $1,000 or more. The 

ASE is conducted at the firm level as oppose to the establishment level. Estimates are generated for 

employer businesses number of firms, sales, receipts, annual payroll, and employment. Industry 

information is available at the 2-digit NAICS level for demographic and veteran status by state, and the 

top 50 metropolitan statistical areas. The first estimates were available in 2016.

Call Report and Community Reinvestment Act Data

The Federal Deposit Insurance Corporation provides comprehensive banking information for all FDIC 

insured institutions on a quarterly basis. Unlike the previous databases mentioned, the definition of a 

small business differs since it is defined by loan size as oppose to the size of the firm. Both the Call 

Report and Community Reinvestment Act data define a small business as loans of $1 million or less. The 

data contains the lending institution’s name, geographic location, loan size, number, and assets. 

Other Small Business Data Sources

Additional databases used to study small businesses are: The American Community Survey, (ACS), 

Current Population Survey (CPS), Statistics of Income (SOI), and Survey of Consumer Finances (SCF). The 

ACS is a yearly household survey that is conducted by the Census Bureau that provides information on 

jobs, occupations, and education attainments, and veteran in the U.S. at the household level. The 

Current Population Survey (CPS) is a household monthly survey that is conducted by the Census Bureau. 

Supplemental inquiries vary monthly and are added to the basic questions. Typically, supplements are 

conducted annually or biannually and provide information on earnings, education, health insurance 

coverage, contingent workers, unemployment insurance, veterans, etc. 

The Survey of Consumer Finances (SCF) is a household survey that is normally sponsored by the Federal 

Reserve in cooperation with the Department of the Treasury every three years. The survey has 

contained a panel element over two periods. Respondents to the 1983 survey were re-interviewed in 

1986 and 1989. Respondents to the 2007 survey were re-interviewed in 2009. This survey provides 

information on the balance sheets, pensions, income, and demographic characteristics of U.S. family’s 

overtime. 

The Statistics of Income (SOI) is a quarterly dataset published by the Internal Revenue Service. This 

publication contains data for both households and businesses and is an invaluable source of statistical 

information. Data on business firms are generally classified by receipt size class for proprietorships, 

partnerships, and corporations. For sole proprietorships and partnerships, only data on net income are 

available. For small business corporations, more data are available. The IRS Source Book for 
Page | 20 Annual Report of the Office of Economic Research, FY 2017

Corporations contains data for corporations by asset size class. Balance sheet and income statement 

information is available for corporations in different asset classes.
Annual Report of the Office of Economic Research, FY 2017 Page | 21

Conclusion

The Office of Economic Research within Advocacy has addressed several research topics pertaining to 

small business in the last four decades. In 2017, OER continued to address small business concerns 

through its regulatory process and research activities. Advocacy’s economists continue to engage in its 

stakeholders by using various mediums including forums, roundtables, conferences, and seminars 

throughout the country. 

Since timely and reliable research are the underpinning that shape policy decisions, OER continues to 

partner with other federal agencies and parties in the pursuit of reliable and timely small business data

and research. 
Page | 22 Annual Report of the Office of Economic Research, FY 2017

Appendixes

Appendix A: Small Business State Profiles 

Appendix B: Dissecting Access to Capital 

Appendix C: The Role of Microbusiness Employers in the Economy
UNITED STATES

30.2 million Small Businesses 58.9 million Small Business Employees 

99.9% of United States Businesses 47.5% of United States Employees 

EMPLOYMENT

1.9 million

net new jobs 

DIVERSITY

8.0 million

minority-owned 

businesses 

TRADE

287,835

small business 

exporters 

OVERALL UNITED STATES ECONOMY

•	 Multiple economic indicators consistently signaled a strengthening US economy in 2017. In the third quarter of 2017, the 

United States grew at an annual rate of 3.4%. The United States’s 2016 growth rate of 1.5% was down from the 2015 rate 

of 2.7%. (Source: BEA) 

•	 The employment situation in the United States continued to improve. In February 2018, the unemployment rate was 4.1%, 

down from 4.7% in February 2017. (Source: CPS) 

EMPLOYMENT

Figure 1: United States Employment by Business Size
 

(Employees)
 

fewer than 20

20 to 99

100 to 499

more than 500

0

20M

40M

60M

80M

100M

120M

2000 2005 2010 2015

•	 United States small businesses employed 58.9 million people, or 47.5% of the private workforce, in 2015. (Source: 

SUSB) 

•	 Firms with fewer than 100 employees have the largest share 

of small business employment. Figure 1 provides further 

details on firms with employees. (Source: SUSB) 

•	 Private-sector employment increased 1.8% during the 12­

month period ending in February 2018. This was above the 

increase of 1.0% during the prior 12-month period. (Source: 

CPS) 

•	 The number of proprietors increased in 2016 by 2.3% relative to the previous year. (Source: BEA) 

•	 Small businesses created 1.9 million net jobs in 2015. Firms 

employing fewer than 20 employees experienced the largest 

gains, adding 1.1 million net jobs. The smallest gains were 

in firms employing 100 to 499 employees, which added 

387,874 net jobs. (Source: SUSB) 

The Small Business Profiles are produced by the US Small Business Administration’s Office of Advocacy. Each report incorporates the most up-to-date 

government data to present a unique snapshot of small businesses. Small businesses are defined for this profile as firms employing fewer than 500 

employees. Net small business job change, minority small business ownership, and exporter share statistics are based on the 2015 Statistics of US 

Businesses (SUSB), 2012 Survey of Business Owners (SBO), and 2015 International Trade Administration (ITA) data, respectively. 

SBA Office of Advocacy	 1 United States Small Business Profile, 2018 
INCOME AND FINANCE

•	 The number of banks decreased by 271 between June 2016 and June 2017 to 5,787 banks. (Source: FDIC) 

•	 In 2016, 5.7 million loans under $100,000 (valued at $82.6 billion) were issued by United States lending institutions reporting 

under the Community Reinvestment Act. (Source: FFIEC) 

•	 The median income for individuals self-employed at their own incorporated businesses was $50,347 in 2016. For individuals 

self-employed at their own unincorporated firms, this figure was $23,060. (Source: ACS) 

Median income represents earnings from all sources. Unincorporated self-employment income includes unpaid family workers, a very small percent of 

the unincorporated self-employed. 

EMPLOYER BUSINESS OWNER DEMOGRAPHICS

Figure 2: United States Employees per Business by Owner’s Demographic, 2015 

Male

Female

Nonminority

Minority

Nonveteran

Veteran

Some other race

Native American-Alaskan

Hispanic

Hawaiian-Pacific Islander

Asian

African American

All Firms

0 2 4 6 8 10 12

Figure 2 shows the average number of employees per employer business by owner’s demographic group according to the Annual Survey of Entrepreneurs 

(ASE). 

TURNOVER AMONG ESTABLISHMENTS WITH EMPLOYEES

Figure 3: United States Quarterly Startups and Exits
 

160K

180K

200K

220K

240K

1995 2000 2005 2010 2015

startups exits

•	 In the third quarter of 2016, 240,000 establishments started 

up, generating 872,000 new jobs in the United States. Startups are counted when business establishments hire at 

least one employee for the first time. (Source: BDM) 

•	 In the same period, 215,000 establishments exited resulting 

in 749,000 jobs lost. Exits occur when establishments go 

from having at least one employee to having none, and then 

remain closed for at least one year. (Source: BDM) 

•	 Figure 3 displays quarterly startups and exits from 1992 to 

2016. Each series is smoothed across multiple quarters to 

highlight long-run trends. (Source: BDM) 

The BLS data covers only business establishments with employees. BLS 

refers to startups as births and exits as deaths. These terms are distinct 

from the BLS openings and closings categories. Openings include seasonal re-openings and closings include seasonal shutterings. Quarterly 

startup and exit values may not align with Figure 3 due to smoothing. 

SBA Office of Advocacy	 2 United States Small Business Profile, 2018 
INTERNATIONAL TRADE

• A total of 294,834 companies exported goods from the United States in 2015. Of these, 287,835, or 97.6%, were small
 

firms; they generated 32.9% of the United States’s $1.3 trillion in total exports. (Source: ITA)
 

SMALL BUSINESS EMPLOYMENT BY INDUSTRY AND COUNTY

Table 1: United States Employment by Industry, 2015 

Industry Small Business Total Private Small Business 

Employment Employment Employment Share 

Health Care and Social Assistance 8,687,568 19,221,864 45.2 

Accommodation and Food Services 7,997,654 13,196,892 60.6 

Retail Trade 5,514,378 15,704,167 35.1 

Manufacturing 5,155,086 11,605,501 44.4 

Professional, Scientific, and Technical Services 5,075,601 8,798,260 57.7 

Construction 4,944,116 6,008,286 82.3 

Other Services (except Public Administration) 4,626,826 5,401,233 85.7 

Administrative, Support, and Waste Management 3,625,057 11,112,465 32.6 

Wholesale Trade 3,486,807 6,076,109 57.4 

Finance and Insurance 1,920,066 6,135,914 31.3 

Transportation and Warehousing 1,650,009 4,616,568 35.7 

Educational Services 1,603,707 3,642,170 44.0 

Real Estate and Rental and Leasing 1,410,530 2,065,427 68.3 

Arts, Entertainment, and Recreation 1,370,194 2,230,822 61.4 

Information 897,225 3,394,317 26.4 

Management of Companies and Enterprises 404,386 3,308,759 12.2 

Mining, Quarrying, and Oil and Gas Extraction 296,005 743,660 39.8 

Agriculture, Forestry, and Fishing and Hunting 136,254 160,144 85.1 

Utilities 112,523 639,234 17.6 

Industries not classified 24,155 24,155 100.0 

Total 58,938,147 124,085,947 47.5

Figure 4: United States Small Business Employment by County, 2015 

Small Business Employment (%)

16 to 50 50 to 60 60 to 74 74 to 100

SBA Office of Advocacy 3 United States Small Business Profile, 2018 
SMALL BUSINESSES BY INDUSTRY

Table 2: United States Small Businesses by Industry and Firm Size, 2015
 

Industry 1-499 Employees 1-20 Employees Nonemployer Total Small Firms 

Firms 

Professional, Scientific, and Technical Services 796,737 747,952 3,410,855 4,207,592 

Other Services (except Public Administration) 680,783 635,810 3,695,012 4,375,795 

Construction 668,196 615,701 2,430,014 3,098,210 

Health Care and Social Assistance 652,900 569,088 1,978,850 2,631,750 

Retail Trade 650,133 594,267 1,985,553 2,635,686 

Accommodation and Food Services 515,566 401,142 371,413 886,979 

Administrative, Support, and Waste Management 331,964 295,202 2,069,144 2,401,108 

Wholesale Trade 304,031 262,019 417,272 721,303 

Real Estate and Rental and Leasing 290,173 277,338 2,635,780 2,925,953 

Manufacturing 247,961 187,862 355,467 603,428 

Finance and Insurance 235,726 218,939 718,472 954,198 

Transportation and Warehousing 177,150 157,974 1,528,264 1,705,414 

Arts, Entertainment, and Recreation 122,089 106,357 1,341,733 1,463,822 

Educational Services 88,826 70,210 710,383 799,209 

Information 73,028 63,321 328,995 402,023 

Mining, Quarrying, and Oil and Gas Extraction 21,657 18,157 98,134 119,791 

Agriculture, Forestry, and Fishing and Hunting 21,584 20,212 236,094 257,678 

Utilities 5,706 4,493 19,968 25,674 

Total 5,881,267 5,265,682 24,331,403 30,212,670

Figure 4 and Tables 1 and 2 display data from the 2015 SUSB. Table 2 includes additional data from the 2015 Nonemployer Statistics (NES). Data for 

counties shown in white in Figure 4 were withheld by the Census Bureau because they do not meet publication standards or could disclose information 

regarding individual businesses. 

REFERENCES

The Small Business Profiles, source data, and methodology are available at https://go.usa.gov/xQT4w. 

ASE Annual Survey of Entrepreneurs, US Census Bureau 

BEA Bureau of Economic Analysis, US Department of Commerce 

BDM Business Employment Dynamics, BLS 

BLS Bureau of Labor Statistics, US Department of Labor 

CPS Current Population Survey, BLS 

FDIC Call Reports, Federal Deposit Insurance Corporation 

FFIEC Federal Financial Institutions Examination Council 

ITA International Trade Administration, US Department of Commerce 

NES Nonemployer Statistics, US Census Bureau 

SBO Survey of Business Owners, US Census Bureau 

SUSB Statistics of US Businesses, US Census Bureau 

SBA Office of Advocacy 4 United States Small Business Profile, 2018 
Dissecting Access to Capital

September, 2017. By Michael J. McManus, Regulatory Economist http://www.sba.gov/advocacy

How much capital do businesses start with?

New businesses can start with a wide range of capital. While the majority of 

business start with less than $50,000, a sizeable number, 12%, use over $250,000.

(Chart 1)

Chart 1: Amount of Startup Capital for Employer Firms

Where does start-up capital come from?

New business owners are often very dependent on their own resources for 

start-up capital. Three fourths of businesses report using personal or family 

savings when starting. Only 12% of businesses use a business loan for startup 

capital. The other top sources are personal credit cards (13%), personal assets 

(11%) and business credit cards (7%). All other sources, like venture capital 

and grants, are used by fewer than 6% of businesses.

After start-up, how do businesses finance themselves year to year?

Financing is a constant need for businesses to stay open and grow. The most 

common sources of this financing are from the owners and banks. Over half of 

businesses (53%) report receiving additional funding from their owners last 

year. Often owners’ investment can be quite substantial, with almost a quarter 

(23%) providing over $50,000 in funding. (Chart 2)

Are businesses seeking new financing options?

Yes, businesses are often looking for new financing relationships. 13% of 

businesses report forming a new connection with a bank or financial institution 

within the last year. After forming a relationship, 74% of those businesses

receive the full funding requested. Credit cards are another popular new financing option (10%), and are similarly 

successful at providing the full funding requested (83%). (Chart 3)

Chart 2: Amount of Annual Financing by Source for Employer Firms

How does a lack of affordable capital affect businesses?

Businesses, especially younger businesses, with trouble accessing financing or have 

high related costs report being impacted. 15% of new businesses under the age of 2 

report financing costs impacting profitability negatively. Half as many older businesses 

(7%), 16 years or older, report financing being a negative impact on profits.

Chart 3: Percent of Employer Firms Establishing New Financial Relationships

Source: 2015 Annual 

Survey of Entrepreneurs; 

U.S. Census Bureau. 

Released July, 2017.
SMALL BUSINESS FACTS

THE ROLE OF MICROBUSINESS EMPLOYERS IN THE ECONOMY

August, 2017. By Brian Headd, Economist

Microbusiness employers (firms with 1-9 employees) are 

the most common kind of employer firm, but they account 

for a relatively small share of employment. 

America’s 3.8 million microbusiness employers made up 74.8 percent of 

all private-sector employers in 2016, and they provided 10.3 percent of the 

private-sector jobs (Chart 1). In addition to the microbusiness employers, 

there were another 24 million nonemployer businesses in 2015. 

(Source: Bureau of Labor Statistics, Business Employment Dynamics, Census Bureau, 

Nonemployer statistics)

Microbusiness employers’ share of employment is declining. 

Microbusiness employers’ share of private-sector employment dropped 

from over 14 percent in 1985 to 11 percent (or 13 million employees) in 

2014 (Chart 2).

(Source: Census Bureau, Business Dynamics Statistics, Initial Firm Size)

Most microbusiness employer firms are more than five years old. 

In 2014, 64 percent of microbusinesses were over five years old, and these 

firms held 67 percent of the microbusiness employment. 

(Source: Census Bureau, Business Dynamics Statistics, Initial Firm Size)

Microbusiness hiring has an oversized role in employment

Microbusiness employers accounted for 11 percent of the 13.7 million 

private-sector net job gains from 2010 to mid-2016, with 70 percent of the 

microbusiness employers gains coming from business turnover (new firm job 

gains minus closure job losses) as opposed to existing firms. 

(Source: Bureau of Labor Statistics, Business Employment Dynamics)

Chart 1: Microbusiness Firm and Employment Shares

10-19

20-99

100-499

500+

100

-499

1-4

Employees

5-9

Employees

1-4

Employees

5-9

Employees

20-99

10-19

500+

Microbusinesses Microbusinesses

Employer Firms Employment

1985 1990 1995 2000 20005 2010 2015

16%

14%

12%

10%

8%

Chart 2: Microbusiness Employment Share Trend

Percent

Finance, Insurance and Real Estate has the highest share of microbusinesses.

In 2014, the “finance, insurance and real estate” industry had the highest share of 

microbusiness employers at 86 percent and “agriculture, forestry, and fishing 

(minus farms)” had the highest share of employment at 31 percent.

(Source: Census Bureau, Business Dynamics Statistics, Initial Firm Size)

While no definitive 

definition exists, 

microbusinesses are 

defined here as

employers with fewer 

than 10 employees 

(initial year firm size).

Source: Census Bureau, 

Business Dynamics Statistics.

http://www.sba.gov/advocacy