JANUARY 10, 2023 - The “SMBs Driving Economic Recovery” report from Sage – the leader in accounting, financial, HR and payroll technology for small and medium-sized businesses (SMBs) – today reveals that, despite ongoing economic turbulence, United States SMBs have become increasingly resilient against macro headwinds and will continue to make significant contributions to the global economy until 2025. Employment by United States SMBs is projected to grow by 0.6% and reach a record high of over 63.3 million jobs by 2025, making up 44.8% of all business workers.
Commissioned by Sage and published in partnership with The Centre for Economics and Business Research (Cebr), the analysis examines the role of SMBs in driving economic recovery across eight key markets: the US, UK, Canada, Spain, Germany, France, Ireland and Portugal, assessing data from 2005 onwards to forecast growth trends between 2022 and 2025.
The report, which assesses data in the period from 2005 to 2019, including the impacts of the Global Financial Crisis, then forecasts growth trends over the next three years. The study further outlines the role of SMBs in powering global economies, with the sector showing no signs of slowing. By 2025, Cebr forecasts that the number of United States SMBs will grow by 36,000 and by nearly 1.2 million across the eight countries studied.
Historical market analysis by Cebr, also underlines the vital role of SMBs in the economic bounce back from the 2007-2009 Global Financial Crisis, projecting a similar path ahead. By 2015, SMBs in the US employed an additional 3.9 million people when compared to 2010, while SMBs in Canada saw a 745,000 rise in employment across the same period, a clear signal of the importance of North American SMBs to the broader economic recovery.
Aziz Benmalek, North America President at Sage says: “In the midst of an extremely challenging economic period, we wanted to quantify the importance of SMBs in bringing economies into recovery. While we do not underestimate the challenges that these business owners face today, they are arguably better positioned to adapt to the changing economic landscape and it’s encouraging to see their vital role in driving worldwide growth continuing.”
“Our research with the Centre for Economics and Business Research (Cebr) gives me confidence that SMBs will once again be the cornerstone of our economic recovery in the years ahead, just as they were in 2009 in the aftermath of the global financial crisis.”
Of all the sectors contributing to growth, the professional, scientific, and technical sector made the strongest gains, not least helped by digitalization, and was important to recovery across most studied markets. For example, in the US, employment by SMBs within this industry grew by 411,000 between 2010 and 2015. More broadly, historical data shows that despite the 2007-2009 recession, business turnover in total US SMBs increased by $437 billion between 2007 and 2012.
“We were lucky enough to survive the last downturn by having a necessary business offering,” said a senior leader at a tax consulting services company interviewed by Sage and Cebr about his experiences navigating the current economic climate. “Our plan for today is to take stock and to continue to watch the business environment closely – there's a lot to consider but it’s a great time to realign our objectives, and we have ambitious plans for the future.”