NCPA - National Center for Policy Analysis

Microbusinesses are Flourishing

October 30, 2002

Small mom-and-pop operations are springing up across the land -- propelled by a new wave of technology and immigration. The tiny businesses are often launched by a couple, staffed by relatives, and aided by inexpensive personal computers.

  • More than one million grocers, tax preparers, and providers of other goods and services sprang to life between 1997 and 2000, according to census figures -- a 7.1 percent jump to 16.5 million such companies, nearly triple the growth rate of all other firms.
  • Such firms comprised 70 percent of all U.S. companies in 2000.
  • States with the largest mom-and-pop growth also had above-average growth in foreign immigrants.
  • Immigrants are more likely to start companies because language difficulties shut them out of conventional jobs. So they create businesses - often stores that serve other immigrants.

States with the highest percentage of these enterprises are Texas, California, Tennessee, Oklahoma and Alaska. Growth of these concerns was highest in Nevada, Florida and Arizona.

The microbusinesses are a key barometer of future economic activity because they can create thousands of jobs. Sam and Helen Walton began a five-and-dime in 1945 that's now Wal-Mart -- the nation's biggest employer, with 1.3 million workers.

Source: Jim Hopkins, "PCs, Immigrants Help Launch Millions of Little Firms," USA Today, October 30, 2002.

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