Small Businesses Drive New England’s Economy

In its report, “The Large Role Small Businesses Play in Employment in New England,” the Federal Reserve Bank of Boston (FRBB) finds that small businesses remain a driving force in the region’s economy. Businesses with fewer than 500 employees account for nearly half of New England’s workforce, employing more than 3.2 million people. They also generated nearly 90% of the region’s net job growth between 2000 and 2023, with young firms leading much of that growth.

The FRBB notes that very small businesses are especially important in rural communities and that New England relies more heavily on small businesses than most other regions of the country. While inflation has become less of a concern for business owners, rising insurance costs and limited insurance availability have emerged as major challenges. Overall, the report concludes that small businesses remain essential to New England’s economic growth and employment.