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Established Mid-sized Businesses in the US are the Primary Engine of Job Growth

Last Updated: 24-Feb-2013

When it comes to new job creation and economic development in the US, people either credit small or big businesses. But, there is another segment that drives job growth and fuels the GDP - the mid-sized businesses - America's Unsung Economic Heroes.

There are more than 200,000 mid-sized businesses in the US middle market. They are typically defined as companies with revenues between $ 10 million to $ 1 billion. These businesses have an incredible diversity of structures. While some are transitioning from start-ups, some are well established with solid growth potential and consistent business practices.

The US mid-sized businesses contribute to one third of both private sector GDP and private sector jobs. They are key drivers of the US economy. Recent studies have found that the middle market firms are resilient throughout the economic crisis.These middle market companies are contributing a significant share to the economic and employment growth in the US.

Largest source of sustainable economic growth

Unlike big Fortune 500 companies, mid-sized businesses adapt more aggressively, innovate more quickly and generate more return on their investments. In 2011, mid-sized businesses generated $3.84 trillion towards US private sector GDP. Today, they generate more than $10 trillion in combined revenues annually making the middle market segment as the world's 5th largest global economy.

Largest source of job creation

The middle market segment accounts for 44.5 million jobs, which is more than one-third of total US employment. In the past 12 years, employment in the middle market grew by 2.8%, a faster growth compared to small and large markets.

In 2012 mid-sized businesses created 1.17 million jobs, while in 2013 they grew employment faster compared to small and large businesses at a rate of 2.5% creating 1.2 million jobs.

Even during the time of recession between 2007 and 2010, mid-sized businesses managed to add 2.2 million jobs while the big businesses shed 3.7 million jobs.

The National Center for the Middle Market's (NCMM) predicts that mid-sized businesses could add one million jobs in 2014 projecting a growth rate of 2.2%.

Middle market businesses Contribution to economy
Year Contribution to GDP # Jobs created # of businesses
2010-11 $ 3.84 Trillion 1.95 Million 195, 000
2011 $ 6.5 Trillion 1.17 Million 197, 000
2013 $ 10 Trillion 1 Million 200, 000
Middle markets survive and thrive in uncertain economic times

During the toughest economic times, 82% of mid-sized businesses survived the recession (2007-10). Despite recession between 2005-10, top 20% of the mid-sized businesses grew at an average annual rate of 26% - nearly 10 times the rate of GDP growth. The reason behind their survival is - they are small enough to react quickly and big enough with sufficient resources to withstand downturns.

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