Dr Jeff Cornwall

Small business growth and decline tends to persist and is not easily reversed, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration.
“We know that overall small business is a dynamic sector of the economy,” said Dr. Chad Moutray, Chief Economist of the Office of Advocacy. “This study shows that the growing and declining firms tend to stay in the same mode over time. Consequently, policies that affect growth or decline can have an impact on small businesses over a longer term than originally anticipated.”
Drs. Rich Perline, Robert Axtell, and Daniel Teitelbaum of NuTech Solutions wrote Volatility and Asymmetry of Small Firm Growth Rates Over Increasing Time Frames with funding from the Office of Advocacy.
The report followed up a study from 2005 that examined firm growth rates by size of firm and industry type. That report found that firm growth tends to be relatively more concentrated among fast and slow growth firms. The current study examined growth rates over a five-year period, using special tabulations of the Census Bureau’s Business File dataset.
This is important information given the fact that 50% of the GDP in the US is made up of small business activity.