Small Business in South Carolina Caron St. John, PhD Clemson University

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

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.

Firms in the United States

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

Firms and Employment in South Carolina (By Employment Size of Firm) Total 0-19 < Firms 77,996 66,900 75,789 2,207 Employees 1,596, , , ,418

Number of SC Firms, by Size

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 , 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

Small Firms and Innovation

Innovation and small firms Small technical firms, on average: Produce 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

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….

Technology Companies in South Carolina Corptech Directory of High Technology Companies, 2005

SBIR and STTR Awards SBIR Awards Dollars Rank STTR Awards 3 4 Dollars.8.8 Rank 2026

SBIR Awards in South Carolina

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