Small Business in South Carolina

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Small Business in South Carolina

• Caron St. John, PhD
• Clemson University

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Purpose

• Small business in the US economy
• Small business in SC
• Small business and innovation
• Technology-based SC companies

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Small Business

• Definition U.S. government defines a small
  business as any company with fewer than 500
  employees
• There are 24.7 million businesses in the US
• Of those, 5.7 million have employees 18.6
  million do not
• Only 17,000 businesses in the US have more than
  500 employees
• 99.7 of all employer- firms are small
• Small firms employ over 50 of the private sector
  workforce, pay 45 percent of total private
  payroll.

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Firms in the United States
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Small Business in South Carolina

• Number of firms that employ others increased from
  70,600 in 1990 to 91,000 in 2003
• In 2002-2003, SC ranked 13th in the nation on
  growth in number of employer-firms
• In 2002-2003, SC ranked 24th nationwide in rate
  of new employer-firm formation, 39th in
  terminations.
• In 2002-2003, self-employment grew from 108,000
  to 120,000, which ranks 11th in the nation.
• Source US SBA Small Business Economic
  Indicators, 2003

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Firms and Employment in South Carolina (By
Employment Size of Firm) Total
0-19 lt500 500 Firms
77,996 66,900
75,789 2,207 Employees
1,596,385 264,144
745,967 850,418
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Number of SC Firms, by Size
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New firms and job growth

• Between 1990 and 2000, the U.S. economy
  created approximately 15 million new jobs.
• Over 1/3 were created by 6.4 million new firms
  formed during those same years.
• Together, on average, year after year, new and
  expanding small firms accounted for over 75 of
  all new job creation in the country.
• In 2000-2001, small business created ALL net
  new jobs 1.1 million. Large employers had net
  job loss of over 150,000.
• Sources Small Business Economic Indicators
  2000, U.S. Small Business Administration Office
  of Advocacy, 2001 Global Entrepreneurship
  Monitor, 2000

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Small Firms and Innovation
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Innovation and small firms

• Small technical firms, on average
• Produce 13-14 times more patents per employee
  than large patenting firms
• Patent more technically significant inventions
  than larger firms,
• These patents are twice as likely as large firm
  patents to be among the 1 most cited.
• Participate in innovations that are more leading
  edge early stage
• Play an essential role in advancing new
  technologies in the economy
• Source CHI Research Inc. , (February, 2003)
  Small Serial Innovators The Small Firm
  Contribution to Technical Change. Small Business
  Administration Office of Advocacy

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Lead in bringing innovations to market

• Small entrepreneurial ventures responsible for
• more than 67 of inventions and
• 95 of all radical innovations
• ..since WWII
• Examples Air conditioning, airplane, artificial
  skin, frozen foods, heart valve, heat sensor,
  helicopter, hydraulic brake, personal computer,
  safety razor, soft contact lens.

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Technology Companies in South Carolina -- 2005
Corptech Directory of High Technology Companies,
2005
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SBIR and STTR Awards

• 97 98 99 00 01 02
• SBIR
• Awards 8 10 8 19 20 25
• Dollars 1.3 1.2 1.7 3.8 4.8 6.2
• Rank 45 37 42 35 30 32
• STTR
• Awards 3 4
• Dollars .8 .8
• Rank 20 26

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SBIR Awards in South Carolina
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Summary

• Small firms critical to growth and innovation in
  the economy
• SC has strong record of new firm creation and
  small business growth
• Firms in key technology areas
• Increased participation by small technology firms
  in federal funding programs