Small Businesses Drive Our Economy

May 6, 2002

By Frank B. Holding Jr.
President
First Citizens Bank

Small businesses come in many packages, from the fledgling enterprise launched in a spare bedroom to the well-established company that's been serving customers for years.

That variety within the small business community can make it difficult to grasp the impact those companies have. But all we have to do is look around to see their influence. They landscape our homes. They develop our software. They entertain us. They feed us. They even take care of us when we're sick.

Small businesses fuel our economy, and we honor them during National Small Business Week, May 5-11.

The data is impossible to ignore. Small businesses create 75 percent of all new jobs, employ 55 million people (half of the workforce) and make a payroll totaling $1.5 trillion.

We know that small companies pull their weight in terms of jobs, revenue, exports, production and all the traditional measures of output. But while small businesses contribute more than half of the U.S. Gross Domestic Product, their value is far greater than the assigned dollar figure.

Small businesses keep our economy churning. They gladly accept the roles of risk-taker and innovator.

Nearly one million new businesses are created every year, representing practically every industry segment. Whether they are part-time ventures or full-time enterprises, their founders have assumed the responsibility of building a new company.

The bottom line is, small businesses take the chances that keep us moving forward.

It's estimated that small firms account for more than half of the innovation in our country—from technologically advanced ideas to common household items. We're amazed at the complexity of airplanes, fiber optic equipment, artificial heart valves and personal computers—all small business creations. But we're also impressed by the simple effectiveness of Liquid Paper, double-knit fabric, soft contact lenses and the zipper, which also came to us from small businesses.

With more than 20 million Americans engaged in some type of entrepreneurship, we can look forward to many more small businesses providing the services, innovations and entrepreneurial attitude that drive our economy.

Let's all take a few minutes this week to salute small businesses for the contributions they make to our communities every day.

Frank Holding Jr. is president of Raleigh, N.C.-based First Citizens Bank. First Citizens is recognized as one of the top banks in the nation for its focus on small business customers. First Citizens Bank is a preferred Small Business Administration lender.