Brooklyn's Progress
October 2001

Small-business owners take pride in being the engine that drives our nation's economy. Small business employs well over half of America's private sector work force. Small firms and individual inventors produced at least 50 percent of the important innovations of the 20th Century - among them air conditioning, the airplane, personal computer and photocopying. Big business employs almost as many people and is also a customer of small business. The catastrophe of September 11 showed us that small business and corporate America are bound in a mutually dependent relationship. In good times, small businesses thrive as suppliers to the large manufacturers of autos, airplanes, appliances and much more. The service industry, more than a third of all small businesses, counts factories, office buildings and the hospitality industry among its customers. In times of economic downturn, it has been small business that has led our nation out of recession, with employment in larger firms rebounding toward the middle of the economic cycle. On September 11 travel came to a standstill. Airlines began massive layoffs. Boeing talked of furloughs ahead. Factory orders were cut, future purchases put on hold. The impact on small business has been enormous. Hundreds of small firms in Lower Manhattan have been damaged or destroyed. Those that survived have been closed for weeks. In the Washington, D.C. area, scene of the attack on the Pentagon, Reagan National Airport remained closed for more than three weeks. Officials estimate losses to area businesses in the hundreds of millions of dollars. But the impact on firms large and small is spread across the country. Restaurants, car rental firms, hotels and motels report business off sharply, particularly in tourist areas. Technology companies, barbershops, taxi companies, print shops, and so many more are hurting. Suppliers to large manufacturers are among the most uncertain about their future. Nevertheless, small-business owners and the major corporations are pitching in to help the families of those who lost their lives. Small-business owners from around the country are telling me stories of how they and their communities are rallying to raise money, give blood and do all they can to show their support. The unique relationship of large and small business will certainly come into play as we rebuild and reunite. A study by David Mills of the University of Virginia found that large firms produce more efficiently at normal levels of demand, but small firms are more flexible and produce more efficiently when demand is very high or very low. Thus small businesses are a stabilizing factor. In the weeks and months ahead, they can be a source of jobs for some of those laid off. The recently unemployed could fill positions of reservists called to active duty. Others will start their own small businesses. Listening to small-business owners is a good way to regain your confidence. As an NFIB member in Illinois, put it: "To all small businesses like mine, things take time, and our time is coming for a stronger and bolder nation." Jack Faris is president of NFIB (the National Federation of Independent Business), the nation's largest small-business advocacy group. A non-profit, non-partisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington, D.C., and all 50 state capitals. More information is available online at www.nfib.com.