The private sector consists of small businesses and large businesses. And the government often defines small as firms with fewer than 500 employees. 4 Using this definition, one-half of the private sector is populated by small businesses and the other half by large businesses. Or, put another way, in 2006, 60 million people were employed by smalls, and 60 million by large. 5 Small firms’ employment share of the private sector (along with the economy’s average firm size) is a reflection of economies of scale; these are largely affected by the economy as a whole, technology, consumer preferences,.
