Do Small Businesses Create Jobs?

Small businesses are creating many of the jobs driving the economic recovery. Many private sector companies and public sector organisations are struggling to maintain the number of people they employ. Both trends will continue, as the profile of the economy continues to change and becomes less predictable.

In recent years, there has been greater recognition for the role start-up and small businesses play in the economy, as it struggles to create enough jobs.

Government highlights the need for savings in the public sector and so the private sector is expected to grow to fill the gap.

In the years ahead, people looking for jobs will increasingly have to find them in the private rather than the public sector, as the former grows and the latter shrinks.

For small businesses, however, taking on extra employees can be a challenge and one they need to get right to survive in a competitive market.

Employment figures are reported as economic statistics but behind the statistics are small businesses and entrepreneurs making everyday decisions they hope will work.

The cost of an employee has to be covered by additional sales and the payback must happen quickly, as few small businesses can afford to carry unnecessary overheads.

To help small businesses government must recognise and support them as job creators, wealth creators and key drivers of the current and future economy.

The ability to run a successful business is still a relatively rare talent and one that needs to be encouraged at all levels.

The rebalancing of jobs from the public to the private sector must continue and to make it happen small businesses need support. To this end, there are a number of things government can do:

First, reduce the cost and the burden of bureaucracy and red tape from the everyday challenge of doing business.
Second, highlight the importance of entrepreneurship across all departments, and particularly within education, as a way to create wealth and build communities.
Third, identify areas of activity where small businesses bid for contracts to deliver supplies and services.
Fourth, help small businesses to grow by breaking into new export markets.
Fifth, promote entrepreneurship as a credible alternative to the traditional educational approach of training people to be employees.

SO, small businesses are creating the jobs we need and we must support them to create more.