Welcome to the “Service Nation”

I get asked a lot of questions at this site. At least once a month I get a question like this: “Which industries in the U.S. have the most small businesses?” Or this: “How many small businesses are involved in service industries versus manufacturing?”

My answer? America is becoming the “Service Nation.”

More and more of us are employed in service-producing businesses.

In fact, most people don’t believe me at first when I tell them the numbers.

How many people work in services industries, you ask? Nearly 80%!

Nearly 80% of the 131+ million workforce in the United States is employed in a service-producing industry. That number has grown over the past 5 years. All indications are that service industries will continue to grow.

The clear loser? Manufacturing employment. Whether we like it or not, manufacturing-related jobs are declining — at a faster clip than any other kind of job.

Small businesses are part of this trend. Take a look at the following chart:

Small business employment by sector

This chart was extracted from the most recent Quarterly Economic Indicators Report issued by the U.S. Small Business Administration. (Download the full PDF Report here.)

The chart shows employment in the United States by industry sector for the last five years. Look to the left of the yearly columns, where it says “Percent small business.” That’s the percentage of employment for that sector in small businesses.

Calculate the raw numbers, and you will see there are 11.8 million people in small businesses in goods-producing industries. But there are nearly 5 times as many — 53.8 million — employed by small business in service-producing industries.

It truly is a service economy — no doubt about it. Welcome to the Service Nation.

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.