Public Papers - 1990
Message to the Congress Transmitting the Annual Report on the State of Small Business
To the Congress of the United States:
I am pleased to submit my first annual report on the state of small business, which documents the progress of small firms in 1989. Over the record-breaking past almost 8 years of economic expansion, the economic environment for small business growth has been remarkable. Entrepreneurs have seized the opportunity to create millions of new enterprises, innovative products, and jobs.
In 1989, the number of business tax returns filed in the United States topped 20 million -- an increase of more than 50 percent over a decade ago. Most of these businesses are very small ventures, but their importance cannot be overstated: by testing thousands of new ideas, products, and processes in the marketplace, they are inventing America's future.
Small firms have had good earnings growth over the years of the expansion, and they continue to generate income for an increasing number of America's workers and entrepreneurs. Our economy experienced unemployment rates of only 5.3 percent in 1989, its lowest level since 1973. Small firms created a more than proportional share of new jobs relative to large businesses, as they have throughout the decade. Even when the pace of economic activity slowed, small firms often cushioned adverse effects on the labor force, laying off workers only as a last resort.
More women became small business owners during the 1980s than at any other time in America's history; the number of women proprietors almost doubled from 2.5 million in 1980 to 4.4 million in 1987. Minorities, too, started businesses in growing numbers during the 1980s. Women and minorities can be expected to continue making great strides in business ownership over the coming decade.
Small firms grew rapidly in the 1980s and contributed immeasurably to the diversity of the American economy. It was not easy. New companies often must struggle to enter competitive new markets with limited resources, vie with more established businesses for a trained labor force, and face increasing international competition.
While the 1980s were a decade of great achievement for America's entrepreneurial small businesses, the 1990s promise great opportunity and great challenge. We must invest in America -- in human, intellectual, and physical capital. We must continue to find the means to educate and empower young people, new immigrants, women, minorities, and all who aspire to be entrepreneurs.
In a time of great economic opportunity around the world, we must equip ourselves, not only to meet new international competition, but to take the lead in a global economy. I am confident that, with the strength and spirit of American enterprise, we will be able to build an even stronger economy in the last decade of the 20th century.
The White House,
October 22, 1990.