2014 state of small business: letter from the Executive Director.

• Author: Daugherty, Scott
• Position: SMALL BUSINESS

Small business has driven North Carolina's growth

Our state, from its first settlements, was focused on small businesses. To be sure, there were large scale plantations like the Orton Plantation on the Cape Fear River, but North Carolina was not well suited for large scale farming. All the state's regions--Coastal, Sandhills, Piedmont and Mountains - attracted some of our earliest entrepreneurs, folks willing to take on the challenges of building a new life in the "wilderness" in exchange for the opportunity to build their own futures. Their endeavors, whether focused on small-scale farming or the making or fixing of things, helped to create one of the most diverse economies in the South.

Today, we continue to attract entrepreneurs - risk-takers who choose North Carolina as a place to live, work and, for many, to create new businesses. The 2010 U.S. Census confirmed North Carolina's growth rate as one of the fastest in the country. We are now the 10th largest state, and our continuing growth trends project North Carolina will become the 7th largest state over the next decade. This growth provides us with an increasing pool of talent to support the continuing expansion of our economy.

Small business is big business in our state

North Carolina's economy has changed substantively over the past 30 to 40 years. Our traditional industries (many of which were small businesses) in furniture, tobacco and textiles experienced dramatic declines. Those were offset by new companies, often small, in industries such as biotechnology, software, IT, automotive and aerospace. And despite sharp declines in traditional manufacturing industries, North Carolina continues to be among the most manufacturing-intensive states in the U.S.

Just how big is small business in North Carolina? It's big. There are more than 800,000 small businesses in the state. Many are sole proprietorships with no employees beyond immediate family members. There are nearly 170,000 small firms with employees in our state. Roughly 96% of these firms employ fewer than 100 people. Small businesses account for 45% of the Gross Domestic Product (GDP) of North Carolina and employ nearly half of our private sector workforce. Clearly, small businesses play an important role in our economy and our potential for growth.

Small businesses have an equally important role in the social fabric of our communities. For instance, they are often the source of first jobs for young people. They are strong...