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While there has been talk over the years concerning the possibility that small business is creating more jobs than big business, I haven't heard too much concerning some of the other aspects that small business have going for it.

In specific reference to small business, the Office of Advocacy recently came out with this Fact Sheet on Innovation.

One of the figures that surprised me was when they said that smaller "patenting firms" outproduce their bigger counterparts by a margin of about 14 to 1 in patents per employee.

Another big difference was that the patents of the smaller companies were much more apt to be referred to in other patents, than patents from larger companies, meaning that the inventions and innovations of smaller companies had much higher relevancy and significance.

The conclusion of the Office of Advocacy was that small firms were around twice as innovative in their products and services per employee than big business.

An insight offered by the Office of Advocacy was important to note, that the ability to invent wasn't good enough, it has to be combined with entrepreneurial abilities. Economic growth isn't connected to innovation alone, but rather to the combination of innovation and entrepreneurship.

This is why many times when the government comes out with a lot of their statistics, they can be quite misrepresentative of what is really happening in the economy. For example, in the last 12 years, according to the Bureau of Labor Statistics, small business created 65% of the new jobs. It also revealed that most of this happens in the first two years of the business.

This is why you always see large firms buying up smaller ones. They have become so bureaucratic and big that they no longer create the cutting-edge products and services that only small companies can do in the quick and nimble way they are set up for.

They are buying not only a company, but the representative innovation and creativity that gives the overall company a boost, until the big company swallows up the little one and makes it another wing of the bureaucratic structure. Then someone leaves a company or starts something creative and innovative in their garage and it begins all over again.