10/17/2011 4:40:27 AM By
The Numbers Guy, Carl Bialik, over at the Wall Street Journal
has a piece in today's edition
looking at some of the claims about small business job creation occurring in the political debate. It is an important topic, and I was glad to see him tackle it. That said, I was disappointed in his treatment of the question. I have a lot of respect for his columns and how he brings focus to important elements of the discussion that involve numbers. With his treatment of small businesses and jobs, he talked to most of the people I would have talked to but ultimately didn't get into any of the depth that I would have expected. Specifically, I don't think he looked at several important elements closely enough for readers:
I've written about job statistics
over the years and most recently focused on them in our Starting Smaller; Staying Smaller
piece. And while I haven't jumped directly into the debate about small businesses job creation vs. new business job creation, that seems to be what Carl was starting to do but didn't really. Most of the job creation (and a lot of the destruction) seen when looking at questions about small business job creation comes from small, new
businesses. These are businesses which are both very small and also happen to be young but which statisticians historically have not been able to disentagle because the data wasn't stored to look at firm dynamics over time. A lot of what we have worked on these past several years has been trying to bring this element of firm age into the discussion about how jobs are created and destroyed. And while the column today talks some about this issue near the conclusion, I wasn't impressed with it's treatment of the topic. I recommend the piece by Haltiwanger, Jarmin, and Mirinda on this topic
. When looking at jobs every lens you observe through has advantages and disadvantages. I wouldn't claim looking through the added element of firm age is perfect, but to me it's still more helpful than just looking at firms smaller than 500 employees.
The other piece I would have liked him to get into a bit which he did not is the lens used by Youreconomy.org
. This is a site run by the Edward Lowe Foundation that uses privately-sourced data, NETS
, which is based on D&B records. What Lowe does which I like and I think helps the debate so much is to look at "resident" and "non-resident" companies and job creation. Essentially this just means that they are able to look at jobs which are created by companies headquartered in a particular region vs. those which are not. They add to this a discussion of business size. While I don't think this is the perfect lens I do think it is at least a helpful one for most local communities in understanding job creation. Because big employers, Fortune 500 companies, for example, can be good employment contributors in some cases but the view you take on their employment might be quite different if they are headquartered in your region vs. if they are not.
2/11/2011 6:03:58 AM By
On the heels of my posting earlier this week describing global trends in small business lending
, the U.S. has new national and state-level data available today
from the Small Business Administration. While I would like to say that this data is about "small businesses" I would reminder readers that really these are data about "small loans" (under $1,000,000) and really small loans (under $100,000). While this might be a proxy for small business lending, I don't think anyone can legitimately argue that it's a full representation of the reality. That said, it's the best we have in the U.S. currently. Arg.
The SBA is reporting a smaller decrease in all categories measured than was seen in 2008-9. But a decrease is still a decrease; it seems the mid-tier loans ($100,000-$1,000,000) continued to be the hardest hit. Specifically the study found "the smallest business loans under $100,000 began to stabilize in 2009-2010—the total was down by 1 percent...[overall] small business lending dropped by 6.2 percent, less than the 8.9 percent drop experienced in large firm lending over the 2009-2010 period."
One new feature of the SBA's website this year seems to be better automation of the data tables and information underlying the state-level data. I think this is something that many scholars studying state-level effects will have some interest in. The data still suffers greatly from the bias of not knowing where the businesses were located that received the loans. For example, Bank of America only shows up in the North Carolina data (from those spreadsheets I examined) since it's headquarters is there. Still, I like the increasing accessibility of this data from the SBA.
10/11/2010 8:00:00 AM By
Suggestions from Brookings and others were successful in getting the Small Business Administration to add a section to its Strategic Plan
recognizing the importance of data:
Strategic Objective 3.3: Promote the availability, analysis, and dissemination of the most current, accurate, and detailed statistics possible on small business.
1. Advocate for improved data collection on small business activity. Pursue new avenues for improved and expanded data products on small business by working with other government agencies and external sources.
2. Carryout and publish data research and analysis. Through both internal analysis and contract research, publish regular, useful, high-quality data and indicators on small businesses and the role that they play in the economy.
3. Raise awareness of data and findings. Publicize the availability of data and findings to federal agencies, Congress, small business organizations, research organizations, the media, and other stakeholders.
Original Post - September 10, 2010
As an organization advocating for more information, the Small Business Administration (SBA) is lacking. They are not a U.S. statistical agency, meaning they don’t actually collect any of their own data. SBA is left to seek different cuts of Census, BLS, or other data by business size or to hope they collect relevant new data on small business. While this has been effective for the SBA to a point, their strategies-to-date seem ineffective at driving consistent, long-term collection of surveys or data that are on topics unique to small business. The Survey on Small Business Finance, canceled some years ago by the Federal Reserve
, would have been much more conceptually at home in the SBA or in an existing statistical agency with strong SBA support. Instead, it, like other topics unique to small business have only been implemented in a hodgepodge manner.
Why do I bring this up? Well, recently the Small Business Administration put out for comment its “Strategic Plan: Fiscal Years 2011- 2016.” I was woefully negligent in actually getting my comments submitted formally, but I wanted to offer a quick nod to comments submitted by Andrew Reamer, formerly of the Brookings Institution and now at George Washington. Andy very aptly points out that data and statistics are missing from the vision for the next five years. If these topics remain off of SBA’s formal radar then any advances in data collection on small businesses that are nascent within the minds of statisticians at Census or BLS will likely only remain thoughts. Adding such concrete recommendations to a document like this can set up future funding efforts or intrapreneurs at one of the agencies. I know from my work that there are a lot of people in the statistical offices looking for new and innovative products. I hope the SBA can help to be an outside advocate for them.
11/18/2009 6:17:57 AM By
This morning a meeting convenes at the Treasury Department, as I understand currently, on the topic of increasing small business finance. This is a good thing. No, this is a great thing. For months we (through the leadership of Alicia Robb) have been tracking data available on small business financing in the United States and reporting that information into a project on the topic organized at the Organisation for Economic Co-operation and Development (OECD)
who has been trying to study data available in developed economies. Read the current scoreboard for the United States
But as happy as I am on this, I am very puzzled. It appears this meeting is taking place in the absence of topical experts on the subject. I can name on my fingers the people who know small business finance data in the U.S. (and internationally) and to my knowledge none of them have been invited to attend this session which is supposedly set to last six hours. We at Kauffman tried to get an invitation to support the nascent effort but had no success.
Interestingly, one of the headlines in today's New York Times is about a new Goldman Sachs program to promote small business loans and education
. This is an issue which has been building by all reports during the crisis but the data available on the topic are few. I hope that today's meeting at Treasury is the start of some leadership on the topic but I also hope any effort is somewhat transparent and brings in outside experts. The Small Business Administration had one expert in financial data, Charles Ou, and he retired this last year. Tapping into the insights of people like William Kerr and Ramana Nanda of Harvard who have a new scoping paper on financing entrepreneurship
will be important to collecting data which is helpful to policy and understanding of the topic, not just descriptive.
9/5/2009 1:13:41 PM By
The Office of Advocacy at the U.S. Small Business Administration puts out a nice publication which tries to answer some of their most frequently asked questions
. This document was just updated so you can find interesting things such as:
- small businesses accounting for half of nonfarm, private real GDP,
- firms with fewer than 500 employees accounted for 64 percent (or 14.5 million) of the 22.5 million net new jobs (gains minus losses) between 1993 and the third quarter of 2008,
- an estimated 627,200 new employer firms began operation in 2008, and
- seven out of ten new employer firms last at least two years, and about half survive five years.
8/11/2009 5:04:12 PM By
8/4/2009 12:39:24 PM By
Each year, the Office of Advocacy at the Small Business Administration helps to support the tabulation of Census Bureau data by firm size under the title "Statistics of U.S. Businesses and Nonemployer Statistics
" or more typically SUSB. While a couple of years dated, these statistics still come in handy quite often. From their 2006 update email...
The Census Bureau has released 2005-2006 updates to the Statistics of U.S. Businesses, produced with partial funding from the Office of Advocacy. The newly added data include business openings/closings and job creation/destruction by industry and geographic location. One new component of this release is establishment births and closures by county. Some these data series go back as far as 1989, allowing users to see how small businesses are affected by the business cycle. See the dynamic data sections of http://www.sba.gov/advo/research/data.html for details.
7/24/2009 9:06:31 AM By
The Office of Advocacy at the Small Business Administration is looking for research proposals for their upcoming year of reports. They do an annual solicitation
looking for research proposals on a set of specific topics, all of which are relevant to the entrepreneurship community. The deadline is approaching quickly - August 14, 2009 - so be sure to take a look soon!
7/12/2009 6:37:00 AM By
Charles Ou, an expert in small business finance for the Office of Advocacy at the Small Business Administration, is retiring this month and as a tribute Advocacy has published an in-depth look at small business financing. Read the report.
5/11/2009 4:33:00 AM By
The Office of Advocacy at the U.S. Small Business Administration released their quarterly indicators
late last week. Entitled "The Economy and Small Business
," these two page overviews are a helpful reference sheet although because of lack of data they usually have more on "the economy" than on "small business" or "entrepreneurship." The general picture which emerges from the statistics is not positive. Over the next couple of days, I am going to delve into a couple of these indicators in more depth to understand what components they have and what each might be telling us about the current state of the economy.