Friday, 3 May 2013

Top-performing companies are the most fertile source of new jobs..

Top-performing companies are the most fertile source of new jobs... so ignore the rest?

This study confirms my comments in Start-Ups Are A Waste of Time and Money

In any given year, the top-performing 1 percent of firms generate roughly 40 percent of all new jobs. 
  • so-called "gazelle" firms (ages three to five) comprise less than 1 percent of all companies, yet generate roughly 10 percent of new jobs in any given year. 
  • The "average" firm in the top 1 percent contributes 88 jobs per year, and most end up with between 20 and 249 employees. 
  • The average firm in the economy as a whole, on the other hand, adds two or three net new jobs each year.

"Because fast-growing young firms account for a disproportionate share of net job creation, policymakers who are worriedly poring over unemployment projections might instead seek to foster the creation of more high-growth firms," said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. "While some new companies will undoubtedly fail, high-growth firms must be started somehow, and the more quickly they are launched and in larger numbers, the faster both output and employment will grow."

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