Small cogs are important, too

Combining all the businesses officially described as small, we get a total of 2,800,000 out of the 3,300,000 enterprises in existence in 1939. In other words, 85 percent of our non-farming firms were “small”—some of them large-small but many just ordinary small. They employed about 45 percent of the people, including proprietors, engaged by the 3,300,000 firms and produced about a third of the goods and services.

As we have seen already, a lot of small businesses closed down during the war and not enough new ones were established to replace them. At the same time, many quite small plants have flourished and expanded because they were able to make some of the parts required by the big firms to which the government gave orders for large, costly kinds of war equipment.

There are many remarkable instances of this dependence of the big producer, who assembles the final product, on the outside small plants, which make the thousands of different parts. The president of one of the largest corporations confessed recently: “Without the more than 500 subcontractors, suppliers, and the thousands of men and women in garages, machine shops, and small manufacturing plants we could not have done our part of the job. ... The majority of our subcontractors and suppliers are small shops—many of them with 5 to 15 workers and most of them with less than 200.”

Only time can tell whether these war-stimulated small producers will be able to adjust themselves for survival in the years of peace. For them and for those of you who want to start out on your own, success and survival depend in large measure on two factors. In the first place, your enterprise must be in a field in which the advantages of large-scale operation over small-scale are not too great. In the second place, it should be of a kind in which the little fellow can get some of the benefits of large-scale operation by banding together, by government aid, or in some other way. Let us stop on these two statements and see what they mean: