Not the Big, but the Middle-Market Businesses Drive U.S. Economy

Privately owned firms that employ a few hundred workers each and generate about $45 million per year on average make up the so-called “middle market” in the business world. This is according to American Express, www.americanexpress.com, and Dun & Bradstreet, www.dnb.com, which recently released some pretty interesting data examining this section of the business arena and its impact on the U.S. economy.

Compared to large corporate firms, which tend to be publicly traded (57%), employ 23,226 people on average, and generate an about an average of $7.7 billion per year, compared to small firms (which have an average of four employees and produce about $276,000 in revenue per year), middle-market companies fall in between these two extremes—often churning between $10 million and $1 billion in revenues. American Express and Dun & Bradstreet say these middle-market companies are nothing short of vital to sustaining the U.S. economy.

In the companies’ first Middle Market Power Index report, American Express and Dun & Bradstreet reveal that while these companies make up less than 1% of U.S. businesses, they make an “outsized economic contribution.” For instance, middle-market businesses have outperformed larger and smaller businesses in creating job growth since 2008. In fact, the report suggests the middle market has created 2.1 million of the nearly 2.3 million net new jobs added during this time period—that’s a staggering 92%. Most business executives would have never dreamed the number would have been so high.

Additionally, 21% of U.S. business revenues come from the middle market and these firms employ a whopping 28% of workers in the private sector. Middle-market companies can be found in all industries, with the heaviest concentrations in sectors such as services (including business services, educational services, and health services); wholesale or retail trade; and manufacturing. Seven U.S. states have a greater than average share of middle-market companies, including Illinois, Wisconsin, Massachusetts, Michigan, New Jersey, New York, and Ohio. So while everyone gives all the accolades to the large corporate companies it appears it’s the midmarket companies that keep the wheels of business. And when it comes to the world IoT (Internet of Things) we will continue middle-market companies play an even greater role in the year’s ahead.

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