D.C. Area Ranks 3rd in Eastern U.S. for Small Business Climate

The Washington Business Journal is reporting that according to a set of statistical measures that it uses, the D.C. area has the third strongest small business sector among Eastern U.S. cities, behind only Pittsburgh and New York City.

According to the survey, the D.C. area had 136,711 small businesses in 2009, evidently the most recent year for which data is available. That is 25 small businesses per 1,000 residents. Last year, the area ranked first in the same survey.

One of the reasons that D.C. has ranked high in the survey is that two of its components relate to private-sector employment growth, and because of the relatively strong economy in the area (due in part to its status as the center of the federal government and the home of the Department of Defense), the job situation is a good deal better than in many other East Coast cities.

Given all of the congressionally instituted preferences for small businesses in federal procurement, one would also expect the D.C. area to do well, since so much procurement takes place in the area. Of course, to the extent that federal facilities and the private-sector contractors that go with them are decentralized and shipped all over the country, D.C.’s share of small businesses may decrease.

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