U.S. Small Business Sector One of the Smallest Amongst Comparable Countries

*The United States has the second lowest share of self-employed workers (7.2 percent).

*The United States has among the lowest shares of employment in small businesses in manufacturing – only 11.1 percent of the U.S. manufacturing workforce is in enterprises with fewer than 20 employees. Eighteen other rich countries have a higher share of manufacturing employment in small enterprises, including Germany (13.0 percent), Sweden (14.4 percent), and France (18.0 percent).

*U.S. small businesses are particularly weak in high-tech. The United States, for example, has the second lowest share of computer-related service employment in firms with fewer than 100 employees and the third lowest share of research and development related employment in firms with fewer than 100 employees.

Center for Economic and Policy Research: U.S. Small Business Sector One of the Smallest Amongst Comparable Countries

(via Kristin Wolff)

1 Comment

  1. My dad asks: “i wonder if the fact that a company is incorporated (like ours) skews the data about self employment? i’m an employee of the corp. even though i own it. so i might not be counted as self employed.”

    I looked at the source of their data (http://stats.oecd.org/index.aspx?r7=899636), and here is their definition of “self-employed”:

    “Definition
    Employment is generally measured through household labour force surveys and, according to the ILO Guidelines, employed persons are defined as those aged 15 or over who report that they have worked in gainful employment for at least one hour in the previous week.

    Self-employed persons include employers, own-account workers, members of producers’ co-operatives, and unpaid family workers. The last of these are unpaid in the sense that they do not have a formal contract to receive a fixed amount of income at regular intervals, but they share in the income generated by the enterprise; unpaid family workers are particularly important in farming and retail trade. Note that all persons who work in corporate enterprises, including company directors, are considered to be employees.

    The rates shown here are the percentages of the self-employed in total civilian employment i.e., total employment less military employees.”

    So it’s not clear what their definition of “corporate enterprise” is, but it sounds like he would probably be considered an employee and not self-employed. However, this criteria is applied across all the countries surveyed. So if this difference is skewing the results, it’s skewing it in favor of countries where there is either very little benefit to having a corporation instead of a partnership or sole proprietorship, or it’s skewing it in favor of countries with lots of businesses that can’t be incorporated for whatever reason. But since the CEPR study looks at a few developed countries with high GDPs only, I’m not sure how much skewing within this set of countries there would be.

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