Report: R.I. small businesses ‘crucial’ to state’s economy

RHODE ISLAND'S SMALL BUSINESSES are "crucial to the fiscal condition of the state," according to a new report from the U.S. Small Business Administration. (Click on the image to view a larger size).
Posted 2/15/13

WASHINGTON – Small businesses in Rhode Island represent 95.9 percent of all employers and employ 55.4 percent of the state’s private-sector workforce, according to a report from the U.S. Small Business Administration, which called small businesses “crucial to the fiscal condition of the state.”

The report, which was released Friday, combines the most recent data (ranging from 2000 to 2009, 2010 and 2011) in a number of categories. The state’s small business workforce, income and finance and business turnover statistics were from 2011.

In 2010, Rhode Island’s small businesses numbered 95,471 (a small business is defined by the SBA as one with fewer than 500 employees).

The state’s small businesses employed 221,019 workers in 2010, most of whom worked at firms with 20 to 499 employees, said the SBA report.

The report went on to describe most of Rhode Island’s small businesses as “very small,” with 74.6 percent of all businesses having no employees and most employers having fewer than 20 employees.

“The employment situation from 2007 to 2010 was weak, and small businesses in Rhode Island had a net job loss,” said the report, adding that the unemployment rate from 2010 to 2011 declined 0.4 percent.

In 2011, the number of businesses formed outweighed the number that closed and the net employment change from this turnover was positive, according to the report. The report called the state’s economy “strong” in 2011, saying that real gross state product increased 2.6 percent and private-sector employment increased 0.6 percent.

Over the last decade, self-employment improved in the Ocean State and minority self-employment fared the best compared with other demographic groups, increasing 114.4 from the year 2000. Over the same period, female self-employment increased 55.4 percent and male self-employment rose 16.4 percent. As those three demographics increased, veteran self-employment dropped 70.8 percent from 2000 to 2011.

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