The Role of Small and Medium-Sized Enterprises to the U.S. Economy

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The Role of Small and Medium-Sized Enterprises to the U.S. Economy

Introduction

Small and Medium-Sized Enterprises (SMEs) refer to independent or non-subsidiary firms that employ a few workers. In other words, an SME refers to a small or medium-sized business enterprise that is independently owned and requires hundreds of employees for their effective management (Godil et al., 1). Most of these SMEs constitute a major force in the economy of any nation. In the U.S., there is more than thirty million small-scale business. These SMEs generate more than 50% of the U.S. gross domestic product (GDP) (Godil et al., 1). According to Godil et al. most small scale businesses benefit a lot from SMEs, since they are able to invest with small capital (1). It is worth noting that most business organizations that have a greater impact on the U.S. economy started as SMEs and were effectively nurtured into greater companies and stores that impact even the global economy. These organizations include Wal-Mart, Microsoft, Apple Computers, and Google. Although most of these organizations started with a few employees, nowadays, hundreds of thousands of citizens in the U.S. depend on these enterprises.

Background of the Project

Although the effects of these SMEs may not be experienced directly. Most of these enterprises play a critical role in creating job opportunities, sparking innovations, and providing opportunities to women and minorities to achieve their financial and economic independence (Lecerf & Omrani, 2). Google started as a small enterprise, and many people have been using it to run emeralds and make a living out of this search engine. In other words, many innovations are sourced from some of these SMEs. The aspect indicates that exploring their effects on the U.S. economy is key (Lecerf & Omrani, 2). It will help the government and other stakeholders, such as banks and other non-governmental organizations, continue supporting these SMEs to increase their growth rate.

More than half of the population of the U.S. depends on self-employment. In most cases, these small enterprises employ a few staff who effectively enhance their operations (Decker et al. 3). Although most of these hire and fire more frequently than big companies, their job creation rate is higher than large enterprises. In addition, the rate at which most of these enterprises expand is enormous. The aspect is linked to the fact that making a decision is relatively easy compared to large companies (Lecerf & Omrani, 2). This means that a small enterprise can take advantage of a business opportunity faster than a large firm. In addition, most of these enterprises are flexible hence creating room for expansion.

In most cases, innovators start by establishing small enterprises before taking advantage of the new marketing niche and their discovery to grow and expand to various heights. Understanding such roles is critical in creating awareness among the major stakeholders of SMEs (Chege & Wang, 4). Once such roles of SMEs are identified, it will be easier for the major stakeholders, such as banks and the government, to channel more support and create an enabling environment to enhance their growth. This aspect forms the basis of the project at large.

Goals

The studys main objectives involve identifying the role of SMEs in the U.S. economy. This will involve considering the number of SMEs in a specific city, identifying their major activities, finding the number of employees working in a specific SME, and estimating the changes initiated by these SMEs. The project will also aim to assess whether the owners of these SMEs are aware of their impacts on the economy. Other projects goals will also involve identifying the rate at which these SMEs help alleviate poverty. In other words, poverty alleviation is one of the major goals of each states government. Therefore, identifying such an impact will be critical in creating more channels for their support. Conversely, the project will aim at helping the major stakeholders of SMEs, more so the government, understand the impact of SMEs on its economy to create an enabling environment that will enhance their growth.

Research Questions

The research questions that will guide the project include:

How do SMEs operate?
Whats their impact on the economy?
Whats their contribution to the national GDP?
Other roles of SMEs.

Hypothesis

Ho: SMEs play a critical role in the U.S. economy.
Ha: SMEs do not play a critical role in the U.S. economy.

Key Stakeholders

There are three major stakeholders in this project at large. They include the government, non-governmental organizations, and financial institutions. Other stakeholders include the SMEs owner and the people who depend on these SMEs to earn a living. It is worth noting that once the role of these SMEs is identified, especially its impact on the U.S. economy, more support will be channeled to enhance their growth. The expansion and growth of these SMEs depend on three major stakeholders, the government, the non-governmental organizations, and financial institutions. The government plays a critical role in creating an enabling environment in enhancing the growth of these SMEs. It also plays a critical role in providing the social amenities such as roads and other facilities necessary for their growth. Conversely, other non-governmental organizations play critical roles in channeling direct support on these premises.

On the other hand, financial institutions, such as commercial banks, have played a critical role in offering loans to these SMEs to enhance their growth. Therefore, the project will benefit the stakeholders of these SMEs as it will be easier to understand the role they play in advancing the nations economy and their impact on increasing the national GDP. The SMEs will also play a critical role in providing the necessary data to complete the project.

Milestones

The entire project will be covered in three milestones, including data collection, analysis, and interpretation. Information gathering will be a major milestone as much time will be required to identify the right means to collect accurate and viable data. Data interpretation will not take much time compared to the data collection milestone. Once the results are out, it will be necessary for this project to be released to the major stakeholders of SMEs, including the government, the financial institutions, and other non-governmental organizations. This will be key in achieving the projects major goal of channeling more support toward the growth of these SMEs.

Methodology

Collection of Data

There are more than thirty million SMEs in the U.S. Although there are fewer SMEs in each city, gathering information from each SME can be overwhelming. This aspect means that it can be difficult to gather information from all the SMEs. Therefore, the project will deploy the major aspects of random sampling to achieve its major goal of collecting accurate and viable data. The owners and the employees of these SMEs will be required to fill in a questionnaire that will help gather the required information. Secondary data will also be sourced from these SMEs to help identify their history.

Data Analysis

The project aims at identifying the role of SMEs in the U.S. economy to appeal for more support from their major stakeholders. In other words, the results of these projects will be used to appeal to the major stakeholders of SMEs to channel more support and enhance their growth. Therefore, SPSS and other statistical tools, such as ANOVA, will enhance accuracy and analyze the data collected in the previous section.

Ethical Issues

Collecting and using privately-owned data from some of these SMEs without consent is illegal. Therefore, the project owners will first seek permission from the necessary government authorities to carry out the study. In addition, the project will depend on SMEs owners consent to collect data from various enterprise. Filling and submitting the questionnaires in this project will be free and voluntary to avoid any cases of bias.

Budget

Project Activities	Estimated Budget
Seeking Consent	$100
Drafting Questionnaires	$50
Printing the questionnaires	$300
Transport	$500
Accommodation	$600
Data analysis	$400
Data Storage	$1000
Miscellaneous Expenses	$700
Total	$3650

Expected Results

The beneficial roles of SMEs in the U.S. economy are expected to be identified. This includes identifying the number of SMEs currently operating in each state, the number of employees who depend on these enterprises, and the revenue collected from these business organizations. An estimate of the SMEs impact on the national GDP will be identified to enhance awareness among the major stakeholders of these enterprises. In the long run, more support from the government and other non-governmental organizations will be expected once they learn of these SMEs impact on enhancing the economys growth. Families and individual citizens who have experienced transformation in their well-being are expected to be identified. These results will be critical in attracting more support to these enterprises, especially from the government expected to create an enabling environment to enhance their expansion.

Conclusion

SMEs refer to small and medium-sized enterprises that a few individuals in various sectors manage. Most of these enterprises require a few hundred employees to be run effectively. It is estimated that more than 30 million SMEs are operating in the U.S. The aspect means that more than 100 million people depend on these enterprises to earn a living. Therefore, more than 50% of the nations GDP comes from these enterprises. However, the impact of these SMEs may not be fully understood by major stakeholders such as the government, NGOs, and other financial institutions. Therefore, the study aims to collect the necessary data and present it to some of these stakeholders to create channels where these SMEs can receive more support to enhance their expansion. In other words, the project aims to ensure that the impact of SMEs on the U.S. economy is identified and the enterprises receive more support to enhance their growth. The establishment and growth of these SMEs are expected to strengthen the U.S. economy, let alone promote the well-being of people who depend on these enterprises to earn a living.

Sources

Godil, D. I., Sharif, A., Afshan, S., Yousuf, A., & Khan, S. A. R. 2020. The asymmetric role of freight and passenger transportation in testing EKC in the U.S. economy: evidence from QARDL approach. Environmental Science and Pollution Research, 27(24), 30108-30117.

Lecerf, M., & Omrani, N. 2020. SME internationalization: The impact of information technology and innovation. Journal of the Knowledge Economy, 11(2), 805-824.

Decker, R., Haltiwanger, J., Jarmin, R., & Miranda, J. 2014. The role of entrepreneurship in U.S. job creation and economic dynamism. Journal of Economic Perspectives, 28(3), 3-24.

Chege, S. M., & Wang, D. 2020. Information technology innovation and its impact on job creation by SMEs in developing countries: an analysis of the literature review. Technology Analysis & Strategic Management, 32(3), 256-271.

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