While big corporations often get the spotlight, it’s the small businesses that truly drive the U.S. economy. Every community benefits from them, as nearly two-thirds of workers are employed by small or mid-sized businesses. The choices that CEOs and owners of these businesses make significantly impact the larger economy.
For the past 20 years, Vistage has conducted quarterly surveys with small and mid-sized business leaders to understand their perspectives on the state of business. These insights have consistently been a reliable indicator of economic health. With data spanning 81 quarters since Q2 2003, Vistage has witnessed substantial changes in corporate America. The early 2000s had us recovering from the dotcom crash and only beginning to explore the internet’s potential. Then came the financial crisis at the end of the decade, leading to many layoffs and a challenging job market. From 2010 to 2019, we experienced low-interest rates, minimal inflation, and rapid technological changes.
The COVID-19 pandemic in 2020 brought unprecedented economic volatility. We saw the Great Resignation as quit rates soared with low unemployment, prompting many to look for jobs that aligned better with their personal needs. As a result, businesses adapted to a new economic environment marked by higher inflation, interest rates, and slower growth. Despite this, the job market remains strong with low unemployment, although quit rates have stabilized.
Everything about business has evolved. Strategies that worked in 2003 or 2013 are not applicable in 2023. However, the accurate predictions from small businesses continue. Even though layoffs are discussed widely in news, unemployment remains low. As of Q2 2023, 48% of small business CEOs plan to expand their workforce in the coming year. While there may be a brief recession, these CEOs stay focused on retaining top talent because having the right team is crucial for when the market picks up again. About 45% believe hiring difficulties are still affecting their operations. With a new growth phase on the horizon, businesses that manage costs wisely now and prepare for future opportunities will likely succeed.
Small businesses are also keen on investing in technology. Recent data shows that 20% are already using AI, and 36% are planning to train their teams in it. This technology is expected to have transformative effects, and small business CEOs will be pivotal in determining its impact on the business landscape.
After two decades of drastic changes, we are now in a rapidly evolving world. The constant factor remains the small and mid-sized business CEOs’ ability to anticipate what lies ahead for the U.S. economy. Although big businesses often steal the limelight, the true future of our economy is closely tied to small businesses, right there in every local community.
