Firm dynamics and job creation in the United Kingdom: 1998–2013

Michael Anyadike-Danes, Mark Hart, Jun Du

Research output: Contribution to journalArticle

Abstract

This article is motivated by a very simple question – ‘what types of firms create the most jobs in the UK economy?’ One popular answer to this question has been High-Growth Firms (HGFs). These firms represent only a small minority – the ‘Vital 6%’ – of the UK business population yet, but have a disproportionate impact on job creation and innovation. We re-visit the discussion launched by the 2009 National Endowment for Science, Technology and the Arts (NESTA) reports, which identified the 6% figure and, using more recent data, confirm the headline conclusion for job creation: a small number of job-creating firms (mostly small firms) are responsible for a significant amount of net job creation in the United Kingdom. Adopting our alternative preferred analytical approach, which involves tracking the growth performance of cohorts of start-ups confirms this conclusion; however, we find an even smaller number of job-creating firms are responsible for a very significant proportion of job creation. We conclude by considering the question – ‘what are the implications for policy choices?’.

LanguageEnglish
Pages12-27
Number of pages16
JournalInternational Small Business Journal
Volume33
Issue number1
DOIs
Publication statusPublished - Feb 2015

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Job creation
Firm dynamics
High-growth firms
Innovation
Policy choice
Proportion
Minorities
Cohort
Start-ups
Art
Endowments
Small firms

Bibliographical note

Co-funding: Economic and Social Research Council (ESRC)

Keywords

  • growth trajectories
  • high-growth firms
  • job creation
  • United Kingdom

Cite this

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Firm dynamics and job creation in the United Kingdom : 1998–2013. / Anyadike-Danes, Michael; Hart, Mark; Du, Jun.

In: International Small Business Journal, Vol. 33, No. 1, 02.2015, p. 12-27.

Research output: Contribution to journalArticle

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