California’s Economy: Role of Small Businesses

By | April 28, 2014

Small businesses are important for California’s economy
Small businesses play critical role in California’s economy. Just with a workforce of less than a hundred small businesses, California gets 98% and employ 37% of productive workforce.

Small businesses keep the California’s economy competitive, by bringing out positive changes in growth and innovation within the state. These businesses encourage the growth of the economy, by providing the employment opportunities.

According to Small Business Economy 2011 report by Small Business Administration, small businesses performed better than large businesses in 75% cases between 1992 and 2010. This indicates the importance of small businesses in the economy.

SMEs generated 44% exports
Small and Medium Enterprises (SMEs) generated about 44% exports. This includes only goods and not the services.

Business conduciveness of California
Easy access to capital
Small businesses get multiple benefits in California. These include easy access to capital (for everyday business expenses), as well as for investment for the long run. Government of California facilitates finance in the form of easy loans including Capital Access Program and other government agencies.

Business laws in place
It’s mandatory for businesses to comply with the laws that are in force in California. These laws include the laws related to starting business, employment and adherence to the laws as mandated.

Strong protection by government
Encourage small business for state contracts
California encourages small businesses in the state to take part in government contracts through Small Business Advocate and a cluster of small business groups. Every state agency must have single point of contact so that for small businesses getting contracts would be hassle free.

Streamline rules: no advertising, bidding
California government has made norms that make it easy for small businesses to get the correct share of in the generation of economy. To ensure this, no advertising or bidding is done.

To conclude, small businesses contribute for the prime entity in California’s $2 trillion economy. California poses an encouraging environment for small business both existing as well as start-ups, given the contributory factors such as good laws and transparent regulation; easy access to finance.