The Office of Advocacy of the U.S. Small Business Administration today unveiled a major new federal government report, The Small Business Economy, 2004, which outlines the state of small business and its contributions to the economy. This latest in an annual series analyzes 2003 data.
"In 2003, the overall economic indicators improved as the economy gained momentum," said Office of Advocacy Chief Economist Dr. Chad Moutray. "Small businesses led the way. However, continued strong economic growth will require an environment that fosters more entrepreneurial activity." He made the remarks during the report's release at Robert Morris College in Chicago.
The comprehensive report examines the role small business plays in the economy. It focuses on economic trends and indicators, regulatory issues at the federal, state, and local levels, innovation and technology transfer, as well as federal government procurement and small business financing data.
Among the report's highlights:
- In the second half of 2003, consumer and business confidence returned and the economy shifted into higher gear. Real gross domestic product increased at an annual rate of 8.2 percent in the fourth quarter and the number of employer firms increased by 0.3 percent over the year. The number of unincorporated self-employed increased by 3.7 percent during the year as well.
- Home-based businesses make up 53 percent of the small business population and serve as incubators for many growing businesses. Home-based businesses face a unique regulatory environment that can restrain their expansion and growth. Notable regulatory barriers include complex IRS rules on home office deductions and the complicated test for determining independent contractor status. Moreover, local zoning laws may also discriminate against home-based businesses.
- Some of America's best-known companies are university spin-offs. Current research suggests that university spin-offs can have a dramatic effect on the economy of a region. These effects have been enhanced by government polices such as the Bayh-Dole Act, which gave universities the rights to inventions derived from federally funded research.
For more information, visit the Office of Advocacy website at www.sba.gov/advo.