New York State Business Climate Study, May 2001

Small and family-owned businesses are a powerful and integral part of New York's - and the nation's - economy. According to the 1999 Small Business Profile, between 1994 and 1998, they added nearly 420,000 new jobs statewide. In 1998 alone, they generated $49.2 billion in income. Ninety-seven percent of all New York firms have fewer than 100 employees, and 99 percent have fewer than 500 employees. In terms of employment, firms with fewer than 100 workers employed 37 percent of all people working in the state. Firms with 500 or fewer employees accounted for 52.5 percent of the state's employment, or 3,674,733 people.

Small firms are clearly critical to the development of new businesses and processes, yet there is little attention paid to their perceptions of the economy and how those perceptions might affect their decisions. For this reason, Alfred University's College of Business, with funding from the Raymond Family Business Institute, commissioned Harris Interactive of Rochester, NY, to undertake a survey in May 2001 of approximately 1,400 businesses across New York. The survey was designed to provide a snapshot of New York's economic "growth driver" at the end of the year's second quarter - a quarter in which traditional economic indicators were declining. This survey gives us a baseline that will be used to discern trends as subsequent surveys are conducted periodically.

Of the 1,400 businesses surveyed, 435 replied for a 31-percent response rate. In our survey we attempted to distinguish between the firms' perceptions of the business climate, and their behavior within the context of those perceptions. Hence, these responses represent something more important than common economic indicators - the thoughts, feelings and behavior of businesspersons as influenced by how they assess New York State's current business climate. Too often, we believe, small businesses are under-rated and their voices not heard.

¹Harris Interactive (Nasdaq: HPOL) is a worldwide market research, polling and consulting firm. It is best known for The Harris Poll and its pioneering use of the Internet to conduct scientifically accurate market research.

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