Report: Connecticut Small Businesses Play Critical Economic Role
Connecticut’s economic fortunes depend heavily on its 350,000 small businesses, which comprise 99% of the state’s total employers and employ 745,000 people—nearly half of the state’s 1.5 million strong workforce.
The U.S. Small Business Administration’s 2020 Connecticut Small Business Profile shows the critical role small businesses—those with fewer than 500 employees—play in Connecticut’s economy.
Small businesses accounted for 972 net new jobs in Connecticut in 2019 and generated 42% of the state’s $16.4 million in exports.
They also contribute to economic diversity, with 43,867 self-employed minorities in Connecticut.
The annual profile depicts the state and national economies in terms of small business employment, trade, and diversity.
It also shows the most important small business industries in the number of firms and total employment.
The statistics were compiled before the coronavirus pandemic battered the state and national economies.
The profile is based on federal data from 2018 and 2019.
Firms employing 20 to 99 people have the largest share of small business employment and experienced the largest job gains, adding 1,588 net jobs.
Small businesses employing 100 to 499 people lost 1,331 net positions.
Of the 5,736 firms that exported goods from Connecticut in 2018, 5,057, or 88%, were small firms.
They generated over $6 billion in total exports.
In the fourth quarter of 2018, 2,228 establishments started up in Connecticut, generating 7,589 new jobs.
But in the same quarter, 2,207 establishments exited, resulting in 6,087 lost jobs.
An exit is when a business goes from having at least one employee to none, and remains closed for at least one year.
Small businesses dominate certain industries, including construction, employing 86%—or 47,079—of the state’s 54,429 construction workers.
Small businesses also employed roughly half of the state’s 290,886 healthcare and social assistance workers in 2019, and slightly less than half—48% or 74,746—of its 155,755 manufacturing employees.
Small businesses employed two-thirds, or 97,325 of the 146,518 people working in Connecticut’s accommodation and food service industries in 2019.
They also employed 75%, or 22,062, of the state’s 29,438 people working in arts, entertainment and recreation in 2019.
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