PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

American Energy: The Good News Economic Story is a Small Business Story

By at 14 August, 2017, 10:05 am

by Raymond J. Keating-

A new study serves up details on the economic contributions from a good news sector – that is, the oil and natural gas industry – during a period when the overall economy has under-performed.

PricewaterhouseCoopers LLP authored Impacts of the Natural Gas and Oil Industry on the U.S. Economy in 2015 for API. As made clear in the report, the impact of the oil and natural gas sector flows throughout the entire economy, and across the nation. However, there’s more to this story, as it’s important to note that nearly every industry included in this study is largely populated by small businesses.

Considering the full impact of the sector, PWC reported that oil and natural gas supported 10.3 million jobs, or 5.6 percent of U.S. total employment, in 2015. It’s impact on labor income (including salaries, wages and proprietors’ income) registered $714.2 billion, or 6.7 percent of the U.S. total, and accounted for $1.3 trillion, or 7.6 percent, of U.S. GDP in 2015.

This study notes that the oil and natural gas sector encompasses 13 industries. Most of these 13 industries (12 out of 13, with a still significant level of small business activity in the 13th), according to the latest Census Bureau data (2014), and as noted in Table 1, are overwhelmingly populated by small businesses.

Note 1: The PWC report explains why the asphalt paving mixture and block manufacturing and asphalt shingle and coating materials manufacturing are included: “Asphalt paving, roofing, and saturated materials manufacturing. This subsector comprises establishments primarily engaged in (1) manufacturing asphalt and tar paving mixtures and blocks and roofing cements and coatings from purchased asphaltic materials and/or (2) saturating purchased mats and felts with asphalt or tar from purchased asphaltic materials. These are primarily petroleum-based products.”

The energy sector plays a major role in our economy, as the PWC report makes clear. In turn, small businesses play a big role in the energy sector in terms of innovation, competition, quality job growth, investment and their economic contribution to local communities.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

 

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