If you’re placing bets on where to put investments into the U.S. economy, are you going to go with small businesses or big businesses? My bets would be on big business, since they seem to have the money and resources to influence policy and help shape their own markets. However, a recent study from the Ohio State University says that this just isn’t true.
In fact, you should pick neither.
According to the report, the strongest sector of the U.S. economy is the Middle Market. Defined as businesses with revenues between $10 million and $1 billion, the Middle Market is the place to be. While just a bit more than half of small businesses survived the recession, 82% of Middle Market folks ended up just fine. In fact, they were more than fine, adding 2.2 million jobs between 2007 and 2010, while big businesses cut 3.7 million.
In short, Middle Market firms generate $3.84 trillion toward U.S. private sector GDP – the equivalent of the world’s fourth largest economy – and 80% of Middle Market firms expect to grow over the next 12 months. And since more than one-third of U.S. workers are employed by the Middle Market, it has an effect on Main Street as well.
Now, be sure to take into account that this report was a joint venture between Ohio State and GE Capital and was reported as a way to launch their recent “Leading From the Middle” summit on the Middle Market. GE has every reason to report all the best facts they can as a way to support their $120 billion investment into the area, which also was announced during the summit.
Hopefully the Fisher College of Business kept their high standards and the Ohio State press office didn’t just blindly report what was asked of them. But I know those folks, and I’m sure if you dug into the 206 page report, you’d just fine more of the same.
But I sure as hell don’t have the time at the moment.