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Saturday, October 12, 2024

g-f(2)3040 Unlocking Potential: How Small Businesses Can Drive Economic Growth

 


genioux Fact post by Fernando Machuca and Perplexity


Introduction:


The McKinsey report "America's small businesses: Time to think big" provides a comprehensive analysis of the role and productivity of micro-, small, and medium-sized enterprises (MSMEs) in the United States economy. It highlights their significance, challenges, and potential for growth.



genioux GK Nugget:


"US MSMEs are the backbone of the economy but lag in productivity compared to large firms and international peers, presenting a significant opportunity for economic growth." — Fernando and Perplexity, October 12, 2024.



genioux Foundational Fact:


MSMEs in the United States employ 58% of workers and produce 39% of value added in the business economy. However, they are only 47% as productive as large firms, compared to 60% in other advanced economies. Closing this productivity gap could significantly boost US economic competitiveness.



The 10 most relevant genioux Facts:


  1. MSMEs account for 58% of jobs and 39% of value added in the US business economy.
  2. US MSMEs are only 47% as productive as large firms, compared to 60% in other advanced economies.
  3. MSMEs dominate certain sectors, accounting for over 75% of workers and value added in construction.
  4. 17% of publicly traded companies valued at $10 billion or more were MSMEs at some point since 2000.
  5. Small tech companies have produced more patents per employee than larger competitors.
  6. US MSME productivity is on par with the UK, Japan, Germany, and Italy in purchasing-power-parity terms.
  7. MSME performance varies across US states and metro areas, influenced by sector mix and local conditions.
  8. Strengthening networks and collaboration between small and large businesses could boost collective productivity.
  9. New technologies, including generative AI, present opportunities for MSMEs to increase productivity.
  10. Closing the productivity gap between MSMEs and large firms could add 5.4% to US GDP.



Conclusion:


The report underscores the critical role of MSMEs in the US economy while highlighting the significant productivity gap they face. By focusing on improving MSME productivity through technology adoption, collaboration with larger firms, and supportive infrastructure, the United States has a substantial opportunity to enhance its overall economic competitiveness and growth.



REFERENCES

The g-f GK Context


Olivia White, Anu Madgavkar, Adi Kumar, Asutosh Padhi, and Kanmani Chockalingam, America’s Small Businesses: Time to Think Big, McKinsey, McKinsey Global Institute, Report, October 2, 2024.



ABOUT THE AUTHORS


Olivia White is a senior partner and a director of the McKinsey Global Institute (MGI) in the Bay Area office; Anu Madgavkar is an MGI partner in the New Jersey office; Adi Kumar is a senior partner in the Washington, DC, office; Asutosh Padhi is a senior partner and global leader of firm strategy in the Chicago office; and Kanmani Chockalingam is an MGI fellow in the Bay Area office.


This report was edited by David Weidner, a senior editor in the Bay Area office.



Classical Summary of the Report


The McKinsey report "America's small businesses: Time to think big" provides a comprehensive analysis of micro-, small, and medium-sized enterprises (MSMEs) in the United States economy. Here's a classical summary of the key points:


  1. Economic Significance: MSMEs are the backbone of the US economy, employing 58% of workers and producing 39% of value added in the business economy.
  2. Productivity Gap: US MSMEs are only 47% as productive as large firms, compared to 60% in other advanced economies. This productivity gap is equivalent to 5.4% of US GDP.
  3. Sector Dominance: MSMEs dominate certain sectors, particularly construction, where they account for over 75% of workers and value-added.
  4. Growth Potential: 17% of publicly traded companies valued at $10 billion or more were MSMEs at some point since 2000, highlighting their growth potential.
  5. Innovation: Small tech companies have produced more patents per employee than larger competitors, demonstrating their innovative capacity.
  6. Regional Variations: MSME performance varies across US states and metro areas, influenced by sector mix and local conditions.
  7. Productivity Comparison: US MSME productivity is on par with the UK, Japan, Germany, and Italy in purchasing-power-parity terms.
  8. Opportunity for Growth: Closing the productivity gap between MSMEs and large firms could significantly boost US economic competitiveness.
  9. Collaboration Potential: Strengthening networks and interactions between small and large businesses could enhance collective productivity.
  10. Technological Opportunities: New technologies, including generative AI, present opportunities for MSMEs to increase productivity.


The report emphasizes the critical role of MSMEs in the US economy while highlighting the significant productivity gap they face. It suggests that focusing on improving MSME productivity through technology adoption, collaboration with larger firms, and supportive infrastructure could substantially enhance overall US economic competitiveness and growth.



The categorization and citation of the genioux Fact post


Categorization


This genioux Fact post is classified as Bombshell Knowledge which means: The game-changer that reshapes your perspective, leaving you exclaiming, "Wow, I had no idea!"


Type: Bombshell Knowledge, Free Speech



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REFERENCES



“genioux facts”: The online program on "MASTERING THE BIG PICTURE OF THE DIGITAL AGE”, g-f(2)3040, Fernando Machuca and Perplexity, October 12, 2024, Genioux.com Corporation.


The genioux facts program has established a robust foundation of over 3039 Big Picture of the Digital Age posts [g-f(2)1 - g-f(2)3039].



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