Small Businesses Important to Idaho’s Economy

Nearly 7,000 new businesses established in Idaho through the worst years since the Great Depression still existed in 2013. These companies represent 13 percent of all employers and employed 49,000, according to the Bureau of Labor Statistics Business Employment Dynamics program.

Small businesses – those with fewer than 50 employees – make up 96.7 percent of all Idaho businesses. They employ over 280,000 people, more than half of all workers in the state.

by business class tableThese federal data provide some insight on the age of businesses and how many new ones survive from year to year. The number of businesses under a year old tends to rise and fall with the business cycle.number of jobs

 

 

 

 

 

 

 

 

New businesses make an important contribution to the economy. Small firms are generally quicker to respond to new opportunities and more oriented to small incremental advances. Overall, their contribution to research and development efforts, high technology employment and innovation is very significant.

Existence of commercial opportunities, an entrepreneurial culture, a supportive business and technical infrastructure and availability of and access to critical resources are keys to making Idaho businesses successful.

The housing bubble and ensuing recession took a toll on businesses all over the nation, particularly small business.

The number of new establishments in 2010 was lower than any other year since the series began in 1994. However, the number of jobs gained through new and expanding businesses is rising, having bounced back to 2008 levels.

According to the Small Business Administration, 5.5 percent of unemployed workers turned to self-employment in 2011. That was up from 3.6 percent in 2006 and 3.1 percent in 2001, illustrating the creativity and ingenuity of some people in stressful economic times.

Young firms generate more than their share of employment. But less than one-half of startups survive more than five years. Idaho has matched the national performance, averaging a 49 percent survival rate since 1994.

five year survival rate

openings and closures

Alivia.Metts@labor.idaho.gov, regional economist
(208) 457-8789 ext. 3486