Small businesses key to economic development

The Small Business Administration has these newsletters. Today I received one publicizing a new research study called Small Business and State Growth: An Econometric Investigation, written by Donald Bruce, John Deskins, Brian Hill, and Jonathan Rork. I had time to read the summary but I found this paragraph interesting:

The authors conclude that this general finding reveals that state efforts to promote small business formation will be more fruitful in terms of generating economic growth than virtually any other policy option in our models.

I do not think our local or state economic development plans place much emphasis on small business. Why not? True, reading the whole study may point out flaws in the study but common sense tells me that small businesses are necessary - even if only as a component in a larger mix of differently size businesses.

The summary is here and the full report is here. Both are in PDF format.