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

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

3. 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.

4. Firms in the United States

6. 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 13th in the nation on growth in number of employer-firms
In , SC ranked 24th nationwide in rate of new employer-firm formation, 39th in terminations.
In , self-employment grew from 108,000 to 120,000, which ranks 11th in the nation.
Source: US SBA: Small Business Economic Indicators, 2003

8. Firms and Employment in South Carolina (By Employment Size of Firm)
Total <
Firms , , , ,207
Employees 1,596, , , ,418

9. Number of SC Firms, by Size

12. 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

14. Small Firms and Innovation

15. 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

16. 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….

17. Technology Companies in South Carolina -- 2005
Corptech Directory of High Technology Companies, 2005

18. SBIR and STTR Awards 97 98 99 00 01 02 SBIR STTR
SBIR
Awards
Dollars
Rank
STTR
Awards
Dollars
Rank

19. SBIR Awards in South Carolina

20. 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