This inspection is a proactive effort to examine (1) the
feasibility of establishing a job creation focus for the 7(a)
loan program, (2) the practicality of identifying industries
appearing to have the greatest potential for significant job
creation, and (3) the options for measuring the 7(a) program
contribution to job creation. The available evidence indicates
that only a small percentage of firms in any given industry
accounts for most of its job growth; therefore, focusing business
loans on INDUSTRIES believed to have high job growth potential
may not, in fact, result in significant job creation. Identifying
in advance the relatively few FIRMS likely to create most of the
jobs is difficult due to such uncontrollable factors as the
highly volatile nature of businesses and the employment they
create. Whether or not SBA adopts a job creation focus, we found
that existing data collection options for measuring progress in
creating jobs have serious flaws and/or drawbacks. Moreover,
drawing direct correlations between the provision of 7(a) loans
and the jobs created would probably be misleading because of the
other variables that materially influence the job creation
process.
[To obtain a copy of this report, contact the Office of Inspector General at 202-205-6580, or email the office at OIG@sba.gov]
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