U.S. has among the world’s smallest small-business sectors

http://www.cepr.net/documents/publications/small-business-2009-08.pdf

An International Comparison of Small Business Employment
John Schmitt and Nathan Lane
August 2009

Executive Summary
An important part of our national identity is built around the idea that – thanks to low taxes, limited regulation, unfettered labor markets, and a national spirit of entrepreneurship – the United States offers an environment for small business that is unmatched anywhere else in the world. The international economic data, however, tell a different story about the state of U.S. small business. By every measure of small-business employment, the United States has among the world’s smallest small-business sectors (as a proportion of total national employment).

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One plausible explanation for the consistently higher shares of self-employment and small-business employment in the rest of the world’s rich economies is that all have some form of universal access to health care. The high cost to self-employed workers and small businesses of the private, employer-based health care system in place in the United States may act as a significant deterrent to small start-up companies, an experience not shared by entrepreneurs in countries with universal access to health care.

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The United States has the second lowest share of self-employed workers (7.2 percent) – only
Luxembourg has a lower share (6.1 percent). France (9.0 percent), Sweden (10.6 percent),
Germany (12.0 percent) the United Kingdom (13.8 percent), Italy (26.4 percent) and 14
other rich countries all have higher proportions of self-employment.

The United States has among the lowest shares of employment in small businesses in
manufacturing. ...

The United States has the second lowest share of computer-related service employment in
firms with fewer than 100 employees. ...

Similarly, the United States has the third lowest share of research and development related
employment in firms with fewer than 100 employees. ...

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