Love of small business cuts across all party lines and political orientations in America. Candidates for every office from president to dog catcher can barely finish their breakfast without praising the small businessmen whom they credit with creating jobs and driving innovation. It’s a great story, except that most small businesses neither add jobs nor innovate, and most small- business owners have no desire to do either.
Erik Hurst and Benjamin Wild Pugsley, economics professors at the University of Chicago Booth School of Business, looked at the responses of 1,214 small-business owners about the number of employees they hoped to have and the number of patents filed by their companies. Contrary to the image of Silicon Valley innovators building industries from nothing but a good idea, only 5 to 6 percent of the small businesses applied for a patent, copyright or trademark in their first five years. In fact, 80 percent of the respondents said they didn’t want to even develop a new technology or process, let alone build their company around one.

“The typical small business is a skilled craftsman or a skilled professional. Plumbers, doctors, lawyers, carpenters, accountants, maybe a shopkeeper. And once you see that, you can compare that to the image of a young Bill Gates or a tech startup. It just feels different,” Hurst told InnovationNewsDaily. “Not only do they not do much in terms of growth or innovation, but when you ask them about when they founded the business, most report that they had no intention to grow or innovate. When you ask them how big they want their business, they say small, maybe a few employees. And when you ask them if they want to do research or development, they say no.”

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