At a Capitol Hill luncheon hosted by SBE Council on November 18, Matthew Slaughter - Professor and Associate Dean at Dartmouth College -- shared the findings of his new research that demonstrates the close economic ties between small and large businesses. In his Business Roundtable-sponsored report "Mutual Benefits, Shared Growth: Small and Large Companies Working Together," Dr. Slaughter highlighted the following key points at the briefing:
• Neither small business nor large business operates in a vacuum. Each is deeply embedded in the overall U.S. economy, with extensive connections to each other. One important connection is the supply chain: small and big businesses selling each other intermediate inputs, i.e., the goods and services used as inputs in the production process.
• U.S.-parent operations of the typical U.S. multinational buys goods and services from more than 6,000 American small businesses; buys a total of more than $3 billion in inputs from these small-business suppliers; and relies on these small-business suppliers for more than 24% of its total input purchases. U.S. small businesses are critically important partners with U.S. multinationals.
• Collectively, U.S. parents of U.S. multinationals purchase an estimated $1.52 trillion in intermediate inputs from U.S. small businesses, which is about 12.3% of their total sales.
• New trade agreements that generated $1 billion in new exports by U.S. multinationals would boost their input purchases from U.S. small businesses by approximately $174 million.
In a panel discussion following Dr. Slaughter's presentation, SBE Council President & CEO Karen Kerrigan commented that a broad pro-business agenda focused on trade, lower taxes, less regulation and policy certainty is an agenda that will strengthen competitiveness for the entire business sector and needs to be vigorously pursued.
Simin Cai, President & CEO, NSG American, Inc. said the success and innovative capacity of his firm is highly dependent upon investment by big companies, particularly broadband providers, and he expressed concern about policies being pursued by the FCC and how these would disrupt his firm's growth and competitiveness.
Brigitte Gwyn, Senior Director for Public Policy at the Business Roundtable spoke about the need for increased trade - which benefits small and large enterprises alike - as well as lower corporate tax rates which would make the U.S. more competitive and attractive from an investment perspective.
To read Dr. Slaughter's report, please click here.
Karen Kerrigan, President & CEO