Research Report by Next Street
A new wave of investment in U.S. infrastructure and manufacturing is reshaping the American economy—and creating significant opportunities for small and mid-sized businesses.
Driven by infrastructure investment, reshoring, energy modernization, supply chain disruptions, and renewed focus on domestic manufacturing, trillions of dollars in public and private capital are flowing into sectors including semiconductors, clean energy, transportation, advanced manufacturing, and critical infrastructure.
Small businesses will be critical to whether these investments deliver on their promise. Across the U.S., 3.7 million small and mid-sized companies supply goods and services to businesses and government, accounting for 50% of U.S. industrial production and 75% of the workforce in supply chain industries. But many face barriers to capital, skilled workers, and the business support needed to compete and grow.
This report explores what it will take to help small businesses capture this opportunity—and turn industrial investment into stronger supply chains, good jobs, and local economic growth.
Top Line Takeaways
1. A Generational Shift in America’s Industrial Economy
Historic Investment: Nearly $2.4 trillion in public investment through the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and CHIPS and Science Act is helping drive significant private investment across the country.
New Sources of Demand: Reshoring, infrastructure investment, energy modernization, and supply chain shifts are creating new opportunities across manufacturing and infrastructure.
2. Small Businesses Are Essential to America’s Industrial Base
Industrial Backbone: Small and mid-sized suppliers account for 50% of U.S. industrial production and employ 75% of the workforce across supply chain industries.
Broad Supplier Base: 3.7 million small and mid-sized businesses already supply goods and services across construction, manufacturing, transportation, and warehousing.
3. Industrial Growth Can Strengthen Local Economies
Local Impact: Nearly 70% of small business revenue stays in local communities, supporting jobs, local economies, and economic mobility.
Job Creation: Businesses with fewer than 500 employees have created approximately two-thirds of U.S. jobs over the past 25 years.
4. Small Businesses Need More Support to Compete
Capacity Gaps: Many small and mid-sized suppliers struggle to access tailored business support and adequate capital, while also facing challenges recruiting and training skilled workers.
Changing Markets: Businesses also need help navigating new market conditions, improving production, and entering emerging industries and supply chains.
5. Capital Will Be Critical to Scaling Small Business Participation
Investment Needs: Small businesses need financing for working capital, R&D, workforce investments, and facility upgrades to meet growing industrial demand.
New Growth Paths: Some businesses will also need financing for mergers, acquisitions, and joint ventures to expand their capabilities and pursue new opportunities.
6. A Coordinated Strategy Can Turn Investment Into Lasting Growth
Three Priorities: The report calls for a “Marshall Plan for Small Business” built around three pillars: business development, capital and financing, and workforce development.
Ecosystem Coordination: Public-private collaboration and stronger coordination across the small business ecosystem will be essential to translating industrial investment into broader economic opportunity.
