In the current issue of Harvard Business Review, Edward Glaeser and William Kerr reveal the results of their research in an article entitled, The Secret To Job Growth: Think Small.
In the article the authors find that there is a high correlation between the existence of small firms and job-growth rates during times of economic recovery. The bottom line is that industries with more small companies and start-ups enjoy faster employment growth and that while politicians like to trot out large companies as examples of recovery these large companies actually generate comparatively little job growth even if they are doing well.
The authors suggest that the way to real economic growth is for politicians to reduce costs for start-up companies and small businesses.
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