Another factor marking small business as an economic change agent stems from small firms providing most of the innovation and market evolution. Although we know that the information technology and semiconductor industries were basically a result of small firm innovation, it is still surprising given that most small firms are limited in human and financial capital. Job creation is also another area where small business has changed the economic landscape. It is well known that almost all net new jobs during the last decade came from small business firms. It appears that small firms are efficient in a less obvious way.
Small firms do certain things better than large firms.
They provide more innovation, adjust more rapidly to changing market needs, supply the largest portion of entrepreneurship and eliminate economic stagnation. Researchers have also acknowledged that our American system incorporates both a democratic and an economic system, which are interdependent and interrelated. Hence, our system includes both productivity and growth issues along with social and political issues. Small firms are the mechanism by which women, minorities and immigrants assimilate and participate in the American process. This recognizes that economic freedom is as vital to our national well being as is political freedom.