Editor's Note

No sector of the economy is as vital, dynamic, and creative as small business. It's a world that's largely ignored by the mainstream press -- if we discount the day-to-day detailed coverage of the recent wild dot-com ride. Yet for the past 30 years we've witnessed an entrepreneurial explosion that has touched every industry, every city, and every ethnic group in the United States. The startling growth of small business has been an extremely important phenomenon in the country's economic life.

It would be easy to lose sight of the impact of millions of small businesses out there. But it is huge -- what begins with scattered individuals who have a dream builds to a crescendo of job expansion, product innovation, and wealth creation. It's also a phenomenon that is poorly documented and yet immensely interesting to wanna-bes, entrepreneurs, policymakers, and, increasingly, academic researchers. The need to bridge the information gap was the inspiration for this year's State of Small Business report. Our goal was to pull together a reference guide with the most exhaustive, up-to-date information available on the small-business landscape -- and yet deliver it in an easily readable format.

Though we knew what we wanted to do, our challenge was to find the best person to interpret the morass of data for our readers -- a person who'd know the right questions to ask and where to look for information, someone who could organize the material and bring to the project an understanding that comes with years of immersion in research on small companies. And navigating the confusing world of academic studies and government statistics would require, first and foremost, clear thinking.

Luckily for us, Inc. alum John Case was ready, willing, and -- as you'll discover in the following pages -- able to take on the project practically single-handedly. Case, now a freelancer, was on our staff for 13 years, as both an editor and a writer. It was Case who coined the phrase "open-book management" in the pages of the magazine, well before most CEOs had even considered putting the concept into practice. Years before most of us had even heard of the Internet (never mind dot-coms), Case was writing extensively about the new economy. His 1992 book, From the Ground Up: The Resurgence of American Entrepreneurship, was a look at how the U.S. economy had changed drastically from big business's glory days in the 1960s to the age of the entrepreneur in the early 1990s.

Of course, a lot has happened since the early 1990s. In this issue of the State of Small Business, Case brings us up to date on where we are in 2001, what's happening in the world of start-ups, and what we might expect in the way of challenges and opportunities in the future. Helping Case put the issue together was reporter Kate O'Sullivan. And making sense of all the data visually -- including creating charts and graphs -- was no small feat but was accomplished deftly by deputy art director Linda Koury and freelancer Dianna Russo Glazer.

Of course, one issue of a magazine can't cover every question a reader might have about the state of small business. Even so, we don't think we've left much out. If you see any gaps, let us know, and we'll do our best in future issues to fill them in. --Nancy J. Lyons, senior editor

The 2001 State of Small Business issue


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