Technology Contributing to Modest Growth in Small Businesses
The unemployment rate has been largely stagnant in the United States over the last six months, but the nation has seen modest economic growth in some areas. One notable such area is small business employment, which rose by 15,000 jobs for the month of February, and lower technology expenses might be one small reason why.
Intuit's small business employment index, which is based on data from Intuit Online Payroll and QuickBooks Online Payroll, showed a 0.07 percent increase in small business jobs between Jan. 24 and Feb. 23. Average monthly compensation and average monthly hours worked both saw modest gains as well.
The economic thinkers behind Intuit's research caution that while a slight increase is good news, the sector could be doing even better.
"Small business employment has risen by 75,000 jobs from this same time last year," Intuit economist Susan Woodward said. "However, if small business employment were growing at its usual proportionate rate of 15 percent of national employment, that number would be 300,000 – a 400 percent difference."
Improving the economy by strengthening small businesses has been a point of emphasis for the federal government. President Barack Obama created initiatives to boost small business growth through tax breaks when he signed the American Taxpayer Relief Act of 2012 - the legislation included immediate write-offs of up to $500,000 for money spent on technology equipment purchases in 2013. There was also a retroactive increase of that same deduction for 2012, from $139,000 to $500,000.
Accountants told BizTech Magazine that the increase in the tech-spending deduction didn't surprise them, as it's a common tactic the government uses to encourage small business growth.
"Officially, it is supposed to stimulate the economy, but in my view, it's one of those feel-good provisions that Congress passes," tax attorney Julian Block said.
Economic growth has been sluggish for much of 2012 and 2013, but with IT jobs and technological innovation as contributing factors, small businesses are taking small steps forward.