NCPA - National Center for Policy Analysis


December 11, 2006

A new generation of entrepreneurs is launching millions of tiny companies differing from business in the past: They don't want employees, says Jim Hopkins in USA Today.

Since the late 1990s, the trend has been growing:

  • There were 19.5 million microbusinesses in 2004, up 27 percent from 1997, when the federal government began publishing annual data on non-employer firms.
  • The number of firms with employees rose a far smaller 7.3 percent during the same period, to 5.9 million.
  • Overall, the Small Business Administration estimates the number of these firms reached the 20 million mark for the first time this year.

In place of paid employees, owners harness new technologies to outsource work, often linking up with other like-minded entrepreneurs to get jobs done in a virtual assembly line spanning the globe, says Hopkins.  For instance:

  • Microbusiness owners work together using new collaborative software to share and update text documents, spreadsheets, videos and other files on remote computers.
  • Some of the software, such as Google's growing documents-management suite, is free, helping keep costs down.
  • A one-man business in consulting, for example, works with four other self-employed workers in the same industry, bidding jointly for new business and to complete projects; the others are in Syracuse, N.Y., Alexandria, Va., and the Boston area.

Source: Jim Hopkins, "Microbusinesses find huge benefits in outsourcing," USA Today, December 11, 2006.

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