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The figures speak for themselves. But is it a fair representation of the situation?

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).

Center for Economic and Policy Research in a Report dated August 2009

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The NYTimes has full coverage here: http://economix.blogs.nytimes.com/2009/08/12/small-businesses-and-self-employment-around-the-world/

It’s an interesting statistic, but not a terrible one. The reason it is so shocking is it changes the mental image of American entrepreneurship.

To say that one third of computer related employement are small businesses still points to a significant entrepreneurial population. Taking into account the numbers of employees in absolute terms, the US working population dwarfs other countries, so there may be an effect of the law of large numbers.

If we were considering the economic value of entrepreneurship among all these countries, I’m certain the per capita market capitalization firms started in the US by entrepreneurs is significantly larger than in other countries. Additionally, the rates of M&A in the US are likely higher encouraging serial entrepreneurship and eventual consolidation of existing businesses.

Other additional data points that would be enlightening could include these ratios for China, Russia and India for there may be inherent differences in developed and developing countries.

Furthermore, factors contributing to these differences among OECD countries could include any of a number of different factors: bankruptcy laws, healthcare costs, M&A activity, incorporation requirements, differences in recording methodologies, law of large numbers, etc.

This data is presented in a potentially very misleading way. Deeper insight into the situation from the authors is essential before drawing any conclusions from these three data points.

One must also question the timing of the report and the “conclusion” of the authors that healthcare is the issue without further discussion of other factors. This is reckless publishing.

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