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Small businesses in the United States are facing a perfect storm of high inflation, rising costs, labor shortages and reduced consumer demand, all of which are creating significant challenges for this segment of the economy. As a result, the optimism of small business owners has plunged to its lowest level since December 2012, according to recent data by the National Federation of Independent Business, a nonpartisan, nonprofit organization that advocates for small and independent businesses in the U.S.

The Small Business Optimism Index plummeted to 88.5, dropping 0.09 of a point, in March, marking the 27th consecutive month the index fell short of the 50-year average of 98.

Kevin Meehan has owned his Los Angeles-based restaurant, Kali, for more than 8 years ­— but lately, he said it feels like he’s had to “roll with the punches harder than ever.”

Meehan, who is also the chef at Kali, said the December holiday season was unexpectedly slower than it had been in recent years, followed by a “really weird January,” with alcohol sales seemingly hurt by the growing “Dry January” sobriety trend.

[Farooq, 10-14-21, U.S. Department of Defense, “Why Small Businesses Are Essential to U.S. National Security”, https://www.defense.gov/news/news-stories/article/article/2810965/why-small-businesses-are-essential-to-us-national-security/#:~:text=Small%20businesses%20are%20the%20engines,small%20businesses%20to%20national%20security., accessed: 7-16-24, AngH]

Small businesses are the engines of the U.S. economy, the heartbeat of communities, and the sources of U.S. global economic strength. This is often heard from the nation's leaders, but what is not often heard is the importance of small businesses to national security.

[Dock, 10-20-23, Business News Daily, “Why Small Businesses Are Good for Local Economies”, https://www.businessnewsdaily.com/1298-small-business-good-for-economy.html, accessed: 7-16-24, AngH]

Small businesses and startups provide more than just jobs for community members. More local small businesses means new ways of thinking and fresh perspectives, almost like an entrepreneur mindset. For large businesses, trying fundamentally new approaches can be akin to turning a battleship, while it is relatively simple for small businesses to reinvent themselves.

Small businesses are the lifeblood of the U.S. economy: they create two-thirds of net new jobs and drive U.S. innovation and competitiveness.  shows that they account for 44 percent of U.S. economic activity. This is a significant contribution, however this overall share has declined gradually.

U.S. gross domestic product (GDP) is the market value of the goods and services produced by labor and property located in the United States. Across the 16 years from 1998 to 2014, the small business share of GDP has fallen from 48.0 percent to 43.5 percent. Over the same period, the amount of small business GDP has grown by about 25 percent in real terms, or 1.4 percent annually. However, real GDP for large businesses has grown faster, at 2.5 percent annually.

[Rakibul, Md Asikur Rahman Chy, Principal Economist at the Policy Research Institute and member secretary of Bangladesh Economists’ Forum, Fetema Tuz Johora, DBA Student Westcliff University, Md Wali Ullah, Bangladesh Awami Leage Politician, Md Abdul Barek Saju, MBA in MIS student at International American University, June 28 2024, Scientific Research an Academic Publisher American journal of Industrial and Business Management, Department of Business Administration Westcliff University, Department of Business Administration International American University, “Driving Growth: The Integral Role of Small Businesses in the U.S. Economic Landscape”, , Accessed July 16 2024, AMH]

5.2.2. Job Creation

[Elevon, 2024, Elevon, “How do small businesses help the economy”, , Accessed July 16 2024, AMH]

How independent businesses help our economy

[Dock, 10-20-23, Business News Daily, “Why Small Businesses Are Good for Local Economies”, https://www.businessnewsdaily.com/1298-small-business-good-for-economy.html, accessed: 7-16-24, AngH]

Small businesses are an important economic engine for both local communities and the national economy.

[Martin, 3-5-22, Forbes, “How Small Businesses Drive the American Economy”, https://www.forbes.com/sites/forbesbusinesscouncil/2022/03/25/how-small-businesses-drive-the-american-economy/, accessed: 7-16-24, AngH]

According to the U.S. Small Business Association (SBA), small businesses of 500 employees or fewer make up 99.9% of all U.S. businesses and 99.7% of firms with paid employees. Of the new jobs created between 1995 and 2020, small businesses accounted for 62%—12.7 million compared to 7.9 million by large enterprises. A 2019 SBA report found that small businesses accounted for 44% of U.S. economic activity. Without small businesses, the American economy and workforce would be a pretty wild landscape to imagine.

How Many Small Businesses Are There in the United States? A small business is one with fewer than 500 employees, according to the . The Census Bureau’s indicate there were 5,358,600 such firms in 2021, up from 5,322,155 in 2020. According to , 56.6% of all U.S. employer establishments in 2021 (the latest year for which these statistics are available) had fewer than five employees, up from 55% in 2020. A new Census Bureau provides free resources, data tools and training opportunities for small businesses to highlight their key economic role. In addition to small employer businesses, there are many self-employed entrepreneurs with no paid employees who run small businesses and contribute to the economy. According to , there were 28,477,518 businesses with no paid employees in 2021. These nonemployer businesses operated in various sectors of the economy such as retail, manufacturing and services.

Small businesses fuel the economy.  99.9% of businesses in the U.S. are small businesses 33.2M Small businesses in the U.S. Since the late 1990’s, small businesses have  between 43.5% and 50.7% of the United States’ gross domestic output (GDP), which equates to trillions of dollars of economic activity. In 2014, the most recent data available, small businesses generated nearly $5.9 trillion. By comparison, large businesses generated $7.7 trillion to the national GDP that same year.     Small businesses are big employers.  45.9% of Americans are employed by a small business 61.6M Americans are employed by a small business The majority of small businesses () operate without employees, and those small employers who hire staff employ nearly half of the American workforce. Leading industries for small businesses include professional and business services, financial activities, and wholesale and retail trade, boasting 3.5 to over 7 million businesses within each sector.

Just as enough tiny droplets of water slowly fill a bucket, the growth of small businesses fills the U.S. economy. Big corporations might get a lot of attention when it comes to creating jobs, but small businesses employ more people and are more resilient when times get tough. Before coming up with something innovative that propelled them into growth, all big businesses once started out small. Not only are small businesses driving the U.S. economy, but they also keep the American dream alive. According to the U.S. Small Business Association (SBA), small businesses of 500 employees or fewer make up 99.9% of all U.S. businesses and 99.7% of firms with paid employees. Of the new jobs created between 1995 and 2020, small businesses accounted for 62%—12.7 million compared to 7.9 million by large enterprises. A 2019 SBA report found that small businesses accounted for 44% of U.S. economic activity. Without small businesses, the American economy and workforce would be a pretty wild landscape to imagine. Not only do small businesses provide more jobs, they also bring careers and opportunities. Successful small businesses put money back into their local community through paychecks and taxes, which can support the creation of new small businesses and improve local public services. No matter how small it starts—one, two, five, 10 employees—within that town, the city or the county, your small business creates new economies where once there was nothing. Small businesses are also better able to focus more energy on their customers and their needs, which can make them more adaptable to change in times of economic uncertainty. A global health crisis may have rocked the economy, but the formation of new U.S. businesses intending to hire employees rose to historic peaks in 2021, with nearly 1.4 million applications by September and over 400,000 more than at the same point in 2019. When tough times for big businesses lead to layoffs, small businesses become an opportunity. Small Businesses Help All Businesses To become big, all businesses once started out small. In 1978, when the track-and-field coach and his former student who founded Blue Ribbon Sports by making running shoes with a waffle iron changed their company name to Nike, they never imagined it would become the massive multinational corporation that it is today. The two high school friends and devoted computer tinkerers who ended up founding their own software company in 1975 under the name Microsoft could never have expected how large their once small business venture would soon become. Small businesses grow because they draw innovation, attracting talent that brings inventions or new solutions to old ways of doing business that larger corporations have less flexibility to incorporate. This is why big companies today want to acquire small businesses, for their innovators. Apple and Google may be known for their innovation, but they also buy up small startups with innovative new technology to boost this development. Big businesses and even big government projects depend on small businesses as subcontractors, vendors and customers. Federal bills focusing on new jobs to come out of a recession talk a lot about building bridges and freeways, but less about the small businesses across the country that bid for these contracts and carry them out. No matter where you find significant economic development, small businesses are behind it.

The economic fortunes of small businesses are critical to the U.S., with nearly 62 million Americans employed by such firms, or roughly 46% of workers, according to the Small Business Administration. Overall, the U.S. has more than 33 million small businesses, and they account for the lion's share of job-creation. Between 1995 and 2021, small businesses generated 17.3 million new jobs, or nearly 63% of positions created over that time, SBA data shows.

Small businesses—independent businesses with fewer than 500 employees—are a crucial component of the U.S. economy, as they account for substantial job creation and contribute significantly to the nation’s gross domestic product.

Why Small Businesses Are Critical To The U.S. Economy

[Nicole, 04/16/2017, Amazon Sellers Lawyer, “Trademark Bullying by Big Corporations,” https://amazonsellerslawyer.com/blog/trademark-bullying-by-big-corporations/, accessed: 07/11/2024, shl]

Larger Corporations take extraordinary measures to protect their intellectual property rights, some of these efforts being unethical and illegal. The Patent and Trademark Office defines a trademark bully as “a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” These “bullies” take their preventative measures far beyond the threat of litigation. They will file suit against anyone they deem to be their competition, of whether or not their allegations hold merit. Litigation requires a devotion of time, money, and effort; and many competitors do not have the resources to fight. However, these corporations can afford the financial sacrifice and time spent. Companies are threatening litigation not just for actual infringement, but in situations where logos may be vaguely similar. Companies are also filing suit when they discover a smaller company is selling their product, but at a lower cost. The re-seller is selling an authentic product, but the company does not care. They want them removed, and they will attempt to eliminate their competition at any cost whether or not they are actually committing trademark infringement. This is trademark bullying, it is unethical, and it is happening every day.

[Jacob, 09/09/2019, United States Patent and Trademark Office, “Topping_TPAC_Notice_Fees,” https://www.uspto.gov/sites/default/files/documents/Topping_TPAC_Notice_Fees.pdf, accessed: 07/11/2024, shl]

The Problem:

[Puneet, 01/28/2023, IIPRD Blog, “Trademark Trolls – Tackling The Practice Of Frivolous Trademark Registration,” https://iiprd.wordpress.com/2023/01/28/trademark-trolls-tackling-the-practice-of-frivolous-trademark-registration/, accessed:07/11/2024, shl]

In the current era, intellectual property rights play a critical role in international trade. They are a must-have for entrepreneurs from all walks of life who want to avoid stumbling blocks and gain the benefits of their labours. “To protect the most basic manifestations of one’s creativity, trademarks with a global application are essential.” Because a pictorial representation of one’s innovation is required regardless of the previously mentioned concerns, trademarks have been made available to individuals of all classes and are not limited to a specific stream or business, it is important to protect a trademark. Nowadays, trademark trolls are being employed to take advantage of trademark rights in order to gain unauthorised profits.

[Jonathan, 05/27/2021, Internet Association, “The SHOP SAFE Act: Stemming the Rising Tide of Unsafe Counterfeit Products Online,” https://docs.house.gov/meetings/JU/JU03/20210527/112713/HHRG-117-JU03-Wstate-BerroyaJ-20210527.pdf, accessed: 07/10/2024, shl]

IV. REMOVING PROTECTIONS FOR ONLINE SERVICE PROVIDERS IS NOT THE SOLUTION TO THE COUNTERFEITING PROBLEM.

Abby, 1-19-22, Medium, “Copyright Law & Startup Innovation: Policies That Matter and Where They May be Headed,” https://engineadvocacyfoundation.medium.com/copyright-law-startup-innovation-policies-that-matter-and-where-they-may-be-headed-dea034904e25, accessed 7-9-24, CT]

Fair use and interoperability: Some big companies would like to expand the universe of what software is protected by copyright and which development activities constitute infringement. If that happened, it would prevent startups from using fundamental software development tools, expose them to new litigation risks, and make it harder to launch and compete. But after a decade of litigation, the Supreme Court recently confirmed that developers can use software interfaces — known as application programming interfaces (APIs) — without infringing copyright. The Court held that reimplementing APIs, which creates interoperability and compatibility between computer programs, is a fair use under copyright law.

Abby, 1-19-22, Medium, “Copyright Law & Startup Innovation: Policies That Matter and Where They May be Headed,” https://engineadvocacyfoundation.medium.com/copyright-law-startup-innovation-policies-that-matter-and-where-they-may-be-headed-dea034904e25, accessed 7-9-24, CT]

This week we are reflecting on copyright policy — where it has been, where it might go, and what that means for high-tech, high-growth startups and the Internet users, entrepreneurs, and creators that depend on them. Copyright law, which is supposed to encourage creation and innovation, can also be used as a weapon against progress. And what better time to take stock of that? This week marks Copyright Week, sponsored by the Electronic Frontier Foundation, and the 10 year anniversary of a high-profile protest that stopped two deeply-flawed copyright bills that would have fundamentally changed the way the Internet works. The direction copyright policy takes can have an outsized influence on what startups can (and cannot) do, and policymakers eager to support innovation should keep that in mind.