Entrepreneurs and small business owners are an optimistic group. They’re bullish on themselves and their own industry. But when it comes to the overall economy, they’re not so upbeat. That’s the conclusion of a new global survey of small companies, “The Future of Business Survey,” being conducted monthly by Facebook and coordinated by the World Bank and the OECD.
“We wanted an index that aggregated small businesses around the world,” said Dan Levy, Facebook Vice President, Small Business. In establishing this far-reaching survey, Facebook was responding to a request from the World Bank and the OECD (Organisation for Economic Co-operation and Development) – a group of 35 countries devoted to supporting economic development.
The most recent results show that US businesses feel positively about their own prospects with a 56% confidence rate in their own companies and a 45% confidence rate for their industry. But that optimism drops precipitously when asked about the economy in general – with only a 22% confidence rate.
Canadian small businesses were even more pessimistic than Americans: only 9% were confident about the economy in general. But once again, that “I can do anything” entrepreneurial attitude and belief in oneself was far higher: 51% were confident about their own business and 43% were confident of their industry.
The survey showed that throughout the world, small businesses are worried about the larger economy they operate in. British entrepreneurs showed only a 6% confidence rate, perhaps reflecting their concerns since Brexit. And Mexican small businesses have little or no confidence in their economy – with a minus 23% confidence level.
Survey results show that US mid-size and larger small companies are considerably more optimistic than smaller businesses, with only 14% of solo entrepreneurs feeling confident about the overall economy, down from 22% in December. That may perhaps reflect what small businesses expect in a Trump administration: fewer regulations for larger companies, but for the smallest companies the loss of health care and potentially less government assistance for small business.
Confidence in Overall Economy by company size
“Just me” – 14%
2-4 employees – 19%
5-9 employees – 41%
10-19 employees – 46%
20-49 employees – 34%
50-250 employees – 33%
Future of Business Survey, February 2017
Recognizing the critical economic impact of small businesses, the World Bank and OECD wanted to get a better understanding of the concerns of small and medium enterprises (SME’s) globally to help them shape policy and programs. But it’s an almost impossible task to reach such diverse small companies.
That’s where Facebook came in. More than 65 million SME’s have a Facebook presence, making it easier to identify and reach a large number of small business owners. Facebook created an online panel consisting of small and medium businesses who use the social media platform. Over 140,000 small and medium businesses from 33 countries responded to the survey in the last nine months.
“What’s been hard is there isn’t a place that can easily aggregate small businesses, especially around the world,” said Levy. “As we’ve grown the number of small businesses active on Facebook, we had a really interesting opportunity to create a panel of small businesses that we don’t think almost anyone else in the world could have done.”
Molly Jackman, Facebook’s Public Policy Research Manager, shared some of the more important findings from the Future of Business Survey:
- Attracting customers is by far the first concern of small businesses with 74% positive
- Increasing revenue and maintaining profitability were the next two biggest concerns
- Fewer than a third of US businesses listed taxes and regulation among their biggest concerns
- Women business owners report facing the same challenges as men
- Women are as optimistic about their prospects, as much as or more than the men
“Businesses that embrace digital (solutions) tend to be doing the most trade and are most optimistic,” said Jackman.
“The survey was designed by the World Bank and OECD,” said Levy, emphasizing that the purpose of the survey was to help identify the attitudes and concerns of small businesses worldwide, especially those businesses that were utilizing digital solutions and connecting to others through online social media and other tools. “Those businesses tend to be more open and connected,” according to Levy.
“Small business has always been important to Facebook, and they matter to the world. Half of jobs come from small businesses,” said Levy. “We’re investing in it.”
Copyright, Rhonda Abrams, 2017
This article originally ran in USA Today on March 22, 2017
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