The Large Role Small Businesses Play in Employment in New England

Across the region's six states, small businesses-defined by the Small Business Association as firms employing fewer than 500 workers-generate economic activity in sectors ranging from professional services to construction to health care. They provided more than 3.2 million jobs in New England in 2023, accounting for more than 47.5 percent of the region's total employment; nationally, small businesses accounted for 46.3% of total employment. In many of the region's counties, particularly in rural northern New England, firms with fewer than 20 employees accounted for more than 30 percent of all jobs. And across the region, such businesses employed nearly 1.2 million workers.

Excluding Massachusetts, the New England states collectively and individually rely more on small businesses for employment than the United States does. As of 2023, Vermont had the country's third highest share of workers employed at small businesses.

Regionally and nationally, the small business share of total employment has trended downward slightly over the last two decades, but these firms remain a vital component of the New England and U.S. economies. In fact, despite the downward trend, small businesses contributed 89.9 percent of net job creation in New England from 2000 to 2023, often from small start-ups growing into larger businesses.