SmallBizResource Blog -- Research

Small-Business Ups And Downs

Posted by Gayle Kesten Friday, Nov 14, 2008, 02:40 PM ET

Small businesses may not be a very optimistic bunch, but if it's any consolation, we sure are innovative.

First the bad news: Small businesses' confidence in the economy is at its third-lowest reading in the 35 years since the National Federation of Independent Businesses (NFIB) began publishing its "Small Business Economic Trends" report. Its October report, based on a survey of nearly 2,000 members -- the majority of which have less than 10 employees -- found fewer respondents expect the economy to improve, fewer expect their sales to increase, and fewer plan to bring new people on-board. And those are just some of the "fewers" the report cites; not a single "more than" to be had. "If we're to reach for more acceptable news, our only option is the fact that earnings trends didn't get any worse," says SmallBusinessNewz' Doug Caverly.

Now the good news: We can innovate our way out of this financial crisis! A new study out of the SBA's Office of Advocacy found the smaller the company, the bigger the patent per employee ratio. More to the point, even within small companies, the very smallest -- those with no more than 25 employees -- produced more patents per employee that a company with 50 employees, and their patents tend to be more significant in terms of impact and originality, according to "An Analysis of Small Business Patents by Industry and Firm Size" (PDF), which surveyed almost 1,300 technology firms, 40% of which were labeled small.

Some sample numbers to elaborate:

One more boost: The number of patents coming from small businesses has increased 53% in the past five years, compared with 10% for large businesses, according to the SBA report.

If you have already come up with an invention to solve our world's woes, then enter it in the Edison Awards competition, which seeks to recognize breakthrough products and services. The deadline is Nov. 21. Another worthwhile resource: InventBay, an online community invented for inventors to gain exposure for their (c'mon, say it with me…) inventions.

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