Data on Small Business--Much Is Collected but It Should Be Integrated for Better Use

Pursuant to a congressional request, GAO attempted to: (1) identify the effects of current Federal programs and policies on small business productivity; (2) recommend any changes in Federal programs and policies which would have a positive effect; and (3) estimate the budgetary impact and effectiveness of those recommended changes. GAO was unable to respond to these specific areas because of a lack of reliable data. However, GAO was able to identify some of the obstacles to acquiring an effective database to be used for small business policy analysis.

The Small Business Administration requires firm-level data from several agencies to analyze the effects of Government policies on individual firms. Agencies, however, are restricted either by laws or by regulations from sharing such data with other agencies. Until this conflict is resolved, little progress can be made toward establishing a meaningful, small business database. A number of legislative approaches have been developed to address the efficient use of data while maintaining the confidentiality of individuals and firms. With control and limitation on access and disclosure, data could be transferred among approved users. In order to develop the database, some technical problems need to be resolved, such as incomplete coverage, lack of comparability, reporting and processing errors, and questions of data timeliness. These problems can be overcome by interagency coordination and the merging of agency files, using common definitions for variables such as regions, firms, and size. However, developing this database has been slow and limited because its development has not been given a high priority in any data-gathering agency. GAO believes that, with the passage of the Paperwork Reduction Act and organizational changes within the Office of Management and Budget, the mandate and organizational components to carry it out are appropriately in place to provide statistical policy, agency guidance, and budgetary control for significant advances in data standardization and use.