Small Business Keeps American Confidence

Where do you place your confidence? Government, private business, newspapers? 

Gallup has an annual Confidence in Institutions Index which has been tracking a very similar question back to the 1970s. Today they released an update for July 2010

While the headline numbers are mostly about confidence in Congress (ouch - 11 percent) and the Presidency (down 15 percent in a year), what always strikes me in this research is how difference small business and big business are rated. In 2010, when asked, "Now I am going to read you a list of institutions in American society. Please tell me how much confidence you, yourself, have in each one -- a great deal, quite a lot, some, or very little?," the second highest response in terms of confidence was small business with 66 percent while big business was scraping near the bottom with 19 percent confidence.

In a survey of youth in 2007 (and actually in earlier iterations), we ask a somewhat similar question, "How much do the following help make your community a better place?" More details on the survey available online but I don't think we published these tables broadly.

A lot 

A little 

Not at all 
Small Business  32% 59% 9%
Big Business 22% 57% 22%
Government 19% 57% 24%
Individual People 55% 40% 5%

We are in the field with an update to this youth survey so we'll see how some of these things have changed among America's youth in the last three years. 

In comparing the two questions and populations, it's interesting to see the only group the youth tended to have different views of in comparison to their others is the role that individual people play in making their community a better place. 

While I realize the phrasing of the two questions is different - confidence vs. making community a better place - I would argue that the two questions really are trying to get at similar things. While Gallup doesn't include individuals in their categories (as they really aren't institutions), it looks to me on reading that some of the confidence that adults might have in small business is really a confidence in the power of individuals. 

Additionally, it looks like the conception of small business being different from big business is something which must emerge after youth. 

I had a great conversation with Carol Corrado at the Conference Board last week in the neighborhood of this topic that was sparked by a Business Week article and some responses from colleagues/grantees at Kauffman

I'm not going to jump into that full discussion but the thing I did want to raise with my post here is that there is no doubt that both small and big business play important roles in the U.S. economy, indeed wealth creation can only come through private businesses. 

Carol's point, I think, was that we really don't have a fully-conceptualized picture of the roles, particularly how big business is often supportive of small business. I won't dispute that (and I hope our data infrastructures and conceptualizations can continue to advance so that these questions can be quantified). 

But the polling continues to show the picture people get when thinking about the little guy is very different than when thinking about big business.

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