High performing firms and job creation: a longitudinal analysis (1998-2013) ERC Insight Paper
Published: 3 April 2017
The OECD High-Growth Firm (HGF) measure was a pragmatic solution to a practical problem. It was designed to assist in identifying the small group of firms which contributed disproportionately to job creation. This statistic could be used to inform national policy and to make comparisons across countries, since it could be readily replicated using business register data. The decade since the measure was first published has seen increasing dissatisfaction amongst the academics and policymakers seeking to make use of it. There are two important criticisms. First, it focuses attention on relatively short ‘bursts’ of growth rendering invisible the reality of growth for the majority of businesses, and second, it does not in fact capture some important members of its target group the ‘relatively small proportion of firms that contribute disproportionately to job creation’.
We present a new analysis of job creation in the UK, using data on a cohort of start-ups born in 1998 to identify three different groups of high performing firms. Of these three groups we find that HGFs as defined by the OCED do not create the most jobs, in fact they grow more slowly and have a lower survival rate than the comparators. Notably, though, most of the observed growth in all three groups takes place within the first five years after start-up.
Business Demography Research Theme
Among SMEs high growth is often episodic and not sustained. This paper reviews a number of international support measures designed to give SMEs the capabilities and resources to sustain fast growth.
Published: 1 September 2013
Feasibility Study – Exploring the Long-Term Impact of Business Support Services. Research Paper No 29
This report is a feasibility study examining whether it is possible to observe a longer term impact of business improvement schemes in general using the old Business Link (BL) offer in England in 2003 as an example. The report covers the methodological issues of assessing the economic impact of business support interventions over an extended time period, although the findings will be of interest to policy makers. Building on the published evaluation of BL in 2006 this new analysis uses 7 additional years of employment and turnover data from the ONS Business Structure Database (BSD) to demonstrate the value of longitudinal evaluation time frames.
Published: 27 March 2015
A consistent theme in the discussion of attempts to stimulate economic recovery in the UK is a recognition of the need to unlock the growth potential of the private sector. This paper explores the simple question – “What types of firms create the most jobs in the UK economy?”
Published: 6 April 2013
Enterprise Research Centre
Warwick Business School
University of Warwick
Coventry CV4 7AL
Enterprise Research Centre
Aston Business School
Birmingham B1 7ET
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