Research Business Report SMEs and the US Economy

Document Type:Research Paper

Subject Area:Business

Document 1

The main research question is that “Can SMEs help to improve the future of the US economy?” The purpose of this report is to try and answer the research question on whether indeed SMEs will help to improve the US economy. To answer this question, the paper reviews the past and determine whether there are any benefits that SMEs have added to the economy inclusive of statistics. The report determines the magnitude of the contribution that SMEs have made to the US economy and then projects what the future of the economy looks like with SMEs in the picture (Ayyagari & Maksimovic, 2017). SMEs can help to improve the future of the US economy based on the positive contributions it has made to the economy in the past and present.

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Findings The state of SME in the Recent Past SMEs have in the last decades been the backbone of the US economy as they have been employing over 50 percent of private sector employees. Compared to other countries, SMEs have in the recent past had a direct impact on the GDP of the US. Besides China, Japan, and the EU, the SMEs in the US has in the recent past accounted for approximately 60 percent of the country’s GDP and the value has since increased (Robu, 2013). (Robu, 2013) Opportunities for Women and Minorities SMEs have also in the recent past acted as a portal through which people move into the economic mainstream. Such business has allowed individuals inclusive of minorities and women to achieve financial success and take pride in their accomplishments.

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Despite the fact that males own a majority of such small business, the past decade has witnessed an increase in the number of SMEs owned by women. 8 million people. Various firms with different sizes based on the number of employees recorded different percentages of employment. Firms with 500 employees and above recorded the highest percentage of employment of 52 percent. Current State of SMEs Today, the SMEs play a vital role in shaping the growth of GDP in the US. They are considered the backbone of the country’s economy. There are approximately over 20 million SMEs in the US that employ over 60 percent of the private workforce and generate almost half of the country’s GDP. The entrepreneurs within the SMEs are especially valued for their role in creating new jobs, improving quality of products, enhancing competition for the existing businesses, introducing new products and services to the market through technological advancement and reducing the prices of goods.

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Consumers today need the constant and reliable provision of products and services of recognized quality in a market that is characterized by intense competition. The demand for consumer specific products is currently high, and this is the reason why many SMEs are sprouting up every single day to meet the growing consumer demand for goods and services. Furthermore, small companies today large companies receive valuable services from small companies who act as sales agents for their products (Pofeldt, 2016). Given that employment is one of the main agenda of the country’s economic agenda, it goes without doubt that any venture that creates employment is a boost to the economy. The SME sector holds the key to the achieving the national economic objectives through poverty alleviation and employment creation (Katua, 2014).

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According to Forbes business magazine, SMEs are expected to skyrocket in the next one decade. Solo-preneurship and Forbes magazine characterize most of this business predicts that by 2026 they should have grown to about 42 million worth of revenue generation from the current 30 million and thus contribute positively to the economy (Pofeldt, 2016). References Altman, E. Journal of Business and Retail Management Research 11(2), 133-139. Ayyagari, M. , & Maksimovic, V. SME Finance. Police Research Working Paper. Why Small Business Ownership Will Skyrocket In 10 Years -- Especially By Solopreneurs. Retrieved from Forbes Magazine Robu, M. The Dynamic and Importance of SMES in Economy. The USV Annals of Economic and Public Administration 13(1), 84-89. Ronita, R. edu/exploringbusiness/chapter/5-2-the-importance-of-small-business- to-the-u-s-economy/ US Trade Representative. Small- and Medium-Sized Enterprises (SMEs).

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