Gazelles as job creators: a survey and interpretation
01 Jan 2010-
TL;DR: This article conducted a meta-analysis of the empirical evidence regarding whether net employment growth rather is generated by a few small and young firms, and found that small firms account for a disproportionately large share of employment growth.
Abstract: It is often claimed that small and young firms account for a disproportionately large share of net employment growth. We conduct a meta-analysis of the empirical evidence regarding whether net employment growth rather is generated by a few
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TL;DR: In this paper, the authors argue that the typical start-up is not innovative, creates few jobs, and generates little wealth, and that by eliminating incentives to create these low probability companies, policy makers can improve the average performance of new businesses.
Abstract: Policy makers often think that creating more start-up companies will transform depressed economic regions, generate innovation, and create jobs. This belief is flawed because the typical start-up is not innovative, creates few jobs, and generates little wealth. Getting economic growth and jobs creation from entrepreneurs is not a numbers game. It is about encouraging the formation of high quality, high growth companies. Policy makers should stop subsidizing the formation of the typical start-up and focus on the subset of businesses with growth potential. While government officials will not be able to “pick winners,” they can identify start-ups with a low probability of generating jobs and enhancing economic growth. By eliminating incentives to create these low probability companies, policy makers can improve the average performance of new businesses.
1,233 citations
Cites background from "Gazelles as job creators: a survey ..."
...123 ( Henrekson and Johansson 2009 ). Moreover, because many gazelles are fairly old and large at the time that they become major wealth and job creators, the story is even more extreme for start-ups....
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1,037 citations
01 Jan 2014
TL;DR: In this article, the authors focus on the entrepreneurial actors within an ecosystem, focusing on the following: the entrepreneurial actor within the ecosystem; the resource providers within the economy; entrepreneurial connectors within the entrepreneurial ecosystem and the entrepreneurial environment of the ecosystem.
Abstract: Increasing the number of high growth firms (HGFs) is now a major focus for industry policy in developed countries. However, existing approaches are proving ineffective. Simply creating supportive framework conditions is insufficient. Creating favourable environments for business start-ups is not leading to the creation of more HGFs. And transactional forms of support for HGFs (e.g. financial assistance) are proving to have limited effectiveness, at least post-start-up. The entrepreneurship ecosystem approach has emerged as a response. It recognises that HGFs flourish in distinctive types of supportive environment. Distinguishing features of entrepreneurial ecosystems include the following: a core of large established businesses, including some that have been entrepreneur-led (entrepreneurial blockbusters); entrepreneurial recycling – whereby successful cashed out entrepreneurs reinvest their time, money and expertise in supporting new entrepreneurial activity; and an information-rich environment in which this information is both accessible and shared. A key player in this context is the deal-maker who is involved in a fiduciary capacity in several entrepreneurial ventures. Other important aspects of an entrepreneurial ecosystem include its culture, the availability of start-up and growth capital, the presence of large firms, universities and service providers. However, studies have tended to take a static approach to the study of entrepreneurial ecosystems, largely ignoring both their origins and stimulus and also the processes by which they become self-sustaining. Creating entrepreneurial ecosystems poses various challenges for policy-makers. There are several general principles that need to be followed. Policy intervention needs to take a holistic approach, focusing on the following: the entrepreneurial actors within the ecosystem; the resource providers within the ecosystem; entrepreneurial connectors within the ecosystem and the entrepreneurial environment of the ecosystem. Finally, it is important that policy-makers develop metrics in order to determine the strengths and weaknesses of individual ecosystems so that their strengths and weaknesses can be assessed, to identify whether and how to intervene, and monitor over time the effectiveness of such interventions. What to measure, approaches to measurement and access to data at the appropriate geographical scales all pose formidable challenges.
565 citations
TL;DR: In this article, the authors argue that policy-makers are looking for high growth firms in the wrong places and propose a reorientation of HGFs, both in terms of appropriate targeting and forms of support.
Abstract: Writing in Small Business Economics Scott Shane argues that policy-makers should stop subsidising start-ups and instead focus on supporting the small subset of new businesses with high growth potential. However, both Shane and other scholars who have made the same argument only offer broad-brush proposals to achieve this objective. The aim of this article, in contrast, is to engage in a detailed discussion of how to create appropriate policies for high-growth firms (HGFs). Drawing on research in Scotland, we argue that policy-makers are looking for HGFs in the wrong places. The heterogeneous nature of HGFs in terms of sector, age, size and origins makes in impractical to target support on particular sectors, technologies or types of firms (e.g., new or R&D intensive). The article proposes a reorientation of HGFs, both in terms of appropriate targeting and forms of support. Public policy also needs to focus on the retention of HGFs which are acquired by non-local businesses. Finally, policy-makers need to properly reflect upon the specificities of their entrepreneurial environment when devising appropriate policy interventions.
452 citations
TL;DR: In this article, the authors argue that women-owned businesses are frequently described as underperforming in that the majority remain small and marginal and that such performance profiles reflect the constrained performance of most small firms.
Abstract: Purpose – Women‐owned businesses are frequently described as under‐performing in that the majority remain small and marginal. The authors dispute this description; within this paper, it is argued that such performance profiles reflect the constrained performance of most small firms. The assertion that women owned firms under‐perform reflects a gendered bias within the entrepreneurial discourse where femininity and deficit are deemed coterminous. In addition, women‐owned firms are expected to under‐perform given expectations of female weakness in the context of male normativity and superiority. Accordingly, the aim of this paper is to critically evaluate the association between gender and business performance suggesting that this critique has implications for the broader development of our understanding of entrepreneuring behaviours.Design/methodology/approach – This is a conceptual research note which explores the notion of performance and under‐performance in the context of gender.Findings – It is argued...
414 citations
References
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Book•
30 Jun 1994
TL;DR: In this paper, the authors introduce the key characteristics of the small business sector and examine the specific problems that face small business owners, showing how the business environment for the smaller firm differs from that of larger companies, and how far their success or failure depends on the wider economic climate.
Abstract: This text introduces the key characteristics of the small business sector. Looking at core business functions, it examines the specific problems that face the small business owner. It shows how the business environment for the smaller firm differs from that of larger companies, and studies how far their success or failure depends on the wider economic climate. It also looks at the different locations, whether urban or regional, and the effect of small businesses on the outside community. In addition, the book studies the internal organization of small companies, encompassing discussions of employment, entrepreneurship, management strategies, organizational cultures, finance and the variety of challenges the small business owner faces in each of these questions.
4,040 citations
Posted Content•
TL;DR: The most complete plant-level data source currently available, the Longitudinal Research Data constructed by the Census Bureau, is used in this article to study the U.S. manufacturing sector from 1972 to 1988 and develop a statistical portrait of the microeconomic adjustments to the many economic events that affect businesses and workers.
Abstract: Job Creation and Destruction is the culmination of a long, ongoing research program at the Center for Economic Studies. Using the most complete plant- level data source currently available--the Longitudinal Research Data constructed by the Census Bureau--it focuses on the U.S. manufacturing sector from 1972 to 1988 and develops a statistical portrait of the microeconomic adjustments to the many economic events that affect businesses and workers. The picture that emerges is one of large, persistent, and highly concentrated gross job flows, with job destruction dominating the cyclical feaures of net job flows. The authors describe in detail those characteristics that destroy and create jobs over time (including industry of origin, wage payments, international trade exposure, factor intensity, size, age, and productivity performance), while also providing a broader measure of the process that will be directly relevant to macroeconomists and policymakers.
2,024 citations
Additional excerpts
...have been criticized by, e.g., Brown et al. (1990); Davis et al. (1996a, 1996b) and...
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Book•
01 Jan 1996
TL;DR: The most complete plant-level data source currently available, the Longitudinal Research Data constructed by the Census Bureau, is used in this paper to study the U.S. manufacturing sector from 1972 to 1988 and develop a statistical portrait of the microeconomic adjustments to the many economic events that affect businesses and workers.
Abstract: Job Creation and Destruction is the culmination of a long, ongoing research program at the Center for Economic Studies. Using the most complete plant- level data source currently available--the Longitudinal Research Data constructed by the Census Bureau--it focuses on the U.S. manufacturing sector from 1972 to 1988 and develops a statistical portrait of the microeconomic adjustments to the many economic events that affect businesses and workers. The picture that emerges is one of large, persistent, and highly concentrated gross job flows, with job destruction dominating the cyclical feaures of net job flows.The authors describe in detail those characteristics that destroy and create jobs over time (including industry of origin, wage payments, international trade exposure, factor intensity, size, age, and productivity performance), while also providing a broader measure of the process that will be directly relevant to macroeconomists and policymakers.
1,815 citations
Posted Content•
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TL;DR: In this paper, the authors trace the time series (Growth of Firms) tradition in the study of market structure and look at how recent studies on entry and the size distribution of firms have modified thinking in this area.
Abstract: This paper traces the time series (?Growth of Firms?) tradition in the study of market structure and looks at how recent studies on entry and the size distribution of firms have modified thinking in this area.
1,623 citations
"Gazelles as job creators: a survey ..." refers background in this paper
...…addressed fundamental issues such as whether Gibrat’s law (that a firm’s growth rate is independent of its size) holds and the impact of the turnover and mobility of firms on employment and economic growth (see, e.g., Sutton 1997; Caves 1998; Lotti et al. 2003; Audretsch et al. 2004 for surveys)....
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Posted Content•
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TL;DR: In this article, the authors trace the time series ("Growth of Firms") tradition in the study of market structure, and look at how recent studies on entry and the size distribution of firms have modified thinking in this area.
Abstract: This paper traces the time series ("Growth of Firms") tradition in the study of market structure, and looks at how recent studies on entry and the size distribution of firms have modified thinking in this area.
1,515 citations