Center for American Entrepreneurship Releases New Report on State of Small Business in Pennsylvania

WASHINGTON, D.C. – One out of every 100 workers in the United States is employed by a small business in Pennsylvania and these businesses generate more than $56 billion in worker wages annually. These and other findings in The State of Small Businesses in Pennsylvania, a new report issued by the Center for American Entrepreneurship (CAE), highlight the national importance of Pennsylvania small businesses and what may be necessary to support their role in future economic development in the commonwealth.

“Repeated research has identified entrepreneurship as a critical driver of national economic success,” said John R. Dearie, president of CAE. “This in-depth study conducted by Common Good Labs focuses on Pennsylvania to show how one state’s small businesses can play an outsized role in the national landscape, and policy’s critical role in supporting these economic engines.”

Because of its enormous size and because it is home to many of the world’s most prominent corporations, the U.S. economy is frequently regarded as a large business economy. In fact, what distinguishes the U.S. economy from other industrialized economies around the world is its foundation of small businesses. According to the Small Business Administration, more than 33 million small businesses operate in the United States, 98 percent of which have fewer than 100 employees and 89 percent of which have fewer than 20 workers. These small businesses employ more than 60 million people, or about half of the American workforce.

The state of small business in America, therefore, is a vital indicator of the strength and vitality of the U.S. economy overall. Similarly, identifying challenges to small businesses – as well as opportunities to support the formation, health, and growth of small businesses – is essential to determining the broad themes and objectives of U.S. economic policy.

With these realities in mind, CAE partnered with Common Good Labs to assess the state of small business in Pennsylvania, home to more than 176,000 independent companies employing between 1 and 49 workers. The report examines the importance and impact of small businesses across the counties of Pennsylvania, quantifies their contribution to local communities, compares Pennsylvania’s small business sector to other states, and identifies steps state and local policymakers should consider to support small businesses.

The report includes a number of important takeaways, including:

• With 176,000 small businesses employing 1 to 49 employees, Pennsylvania ranks 33rd among all 50 states and the District of Columbia regarding small business concentration, with 13.5 small businesses per every 1,000 residents, compared to a national average of 14.6.
• Pennsylvania’s small businesses employ 1.4 million workers – one out of every 100 U.S. workers –reflecting their national importance to jobs and economic value.
• New small businesses are less common in Pennsylvania, but those launched in the state have a 69 percent survival rate — five points higher than the national average — and additional initiatives outlined in Pennsylvania’s state economic development plan could increase both the concentration of small businesses and their longevity.
• The most common small businesses in Pennsylvania are accommodation and food services firms. Other common sectors include construction, retail stores, health care, and social services, and business services.
• Small businesses make unique contributions to Pennsylvania’s rural counties and are also a critical part of Pennsylvania’s urban neighborhoods.
• Opportunities to strengthen small businesses in Pennsylvania include policies intended to encourage and provide resources to grow ownership and remove barriers to success regardless of where an entrepreneur starts.

“CAE thanks Common Good Labs for their splendid work to produce the report and its findings, which echo CAE’s own research regarding startups and entrepreneurship nationwide,” Mr. Dearie said. “The report offers important guidance regarding small business policy at a time when support for these businesses is overwhelmingly bipartisan. We also want to thank the advisory committee of small business support leaders from small business associations, entrepreneur service organizations, and foundations representing regions across the Commonwealth. The committee members gave invaluable input and guidance to the study.”

The full report can be found on the CAE website, startupsUSA.org. Questions regarding the implications of the report for national small business or economic policy can be directed to John Dearie, president of the Center for American Entrepreneurship: [email protected]

Questions regarding the report’s data, methodology, and analysis can be directed to Rhett Morris ([email protected]) or Rohit Acharya ([email protected]), partners at Common Good Labs.

About the Center for American Entrepreneurship (CAE)
The Center for American Entrepreneurship (CAE) is a nonpartisan research, policy, and advocacy organization whose mission is to engage and educate policymakers in Washington, and at state and local levels across the nation, regarding the critical importance of entrepreneurs and startups to innovation, economic growth, and job creation – and to pursue a comprehensive policy agenda intended to achieve a stronger, more resilient, and inclusive U.S. economy through thriving entrepreneurship.

For more information, visit startupsUSA.org

Follow CAE on Twitter (X) and LinkedIn.

About Common Good Labs

Common Good Labs is a data science and research organization that helps mission-driven organizations find new solutions that improve lives and communities. CGL works with foundations, governments, nonprofits, and for-profit businesses.

For more information, visit: commongoodlabs.com

Follow Common Good Labs on Twitter (X) and LinkedIn.