Final answer:
Small businesses are essential to the American economy, providing employment for 35% of workers in private firms and fostering local economic growth and community identity. They represent a diverse array of services and adapt quickly to market changes.
Step-by-step explanation:
Small businesses are a crucial part of the American economy. Despite the prominence of corporate giants, the landscape of American businesses is mostly composed of smaller firms with fewer than 20 employees.
As of 2010, there were 5.7 million firms with employees, and a significant number of these are categorized as small businesses.
These entities play a vital role in the economy by providing employment to 35% of workers in private firms, particularly those at firms with fewer than 100 workers.
Moreover, small-scale businesses encompass a diverse range of services and professions, from dentists and lawyers to those who mow lawns or clean houses.
There are also millions of small 'non-employer' businesses, run by individuals or partnerships, which directly contribute to the economy.
In addition to job creation, small businesses stimulate local economies, foster community identity, and enable individual entrepreneurship. They adapt quickly to changing market demands and bring innovation and competition into various sectors.
Despite not always yielding high economic profits, 'Mom and Pop' firms, such as inner city grocery stores, continue to exist as they fulfill essential community needs and often derive value through non-monetary means or long-term investment in their neighborhoods.