Tech Starts: High-Technology Business Formation and Job Creation in the United States

New and young businesses -- as opposed to small businesses generally -- play an outsized role in net job creation in the United States. But not all new businesses are the same -- the substantial majority of nascent entrepreneurs do not intend to grow their businesses significantly or innovate, and many more never do. Differentiating growth-oriented "startups" from the rest of young businesses is an important distinction that has been underrepresented in research on business dynamics and in small business policy.To advance the conversation, we contrast business and job creation dynamics in the entire U.S. private sector with the innovative high-tech sector -- defined here as the group of industries with very high shares of employees in the STEM fields of science, technology, engineering, and math. We highlight these differences at the national level, as well as detailing regions throughout the country where high-tech startups are being formed each year. The major findings include:* The high-tech sector and the information and communications technology (ICT) segment of high-tech are important contributors to entrepreneurship in the U.S. economy. During the last three decades, the high-tech sector was 23 percent more likely and ICT 48 percent more likely than the private sector as a whole to witness a new business formation.* High-tech firm births were 69 percent highe rin 2011 compared with 1980; they were 210 percent higher for ICT and 9 percent lower for the private sector as a whole during the same period. This is important because the productivity growth and job creation unleashed by these new and young firms -- aged less than five years -- require a continual flow of births each year.* Of new and young firms, high-tech companies play an outsized role in job creation. High-tech businesses start lean but grow rapidly in the early years, and their job creation is so robust that it offsets job losses from early-stage business failures. This is a key distinction from young firms across the entire private sector, where net job losses resulting from the high rate of early-stage failures are substantial.* Young firms exhibit an "up-or-out" dynamic,where they tend to either fail or grow rapidly in the early years. The job-creating strength of surviving young firms, while strong for young businesses across the private sector as a whole, is especially distinct for high-tech startups: the net job creation rate of these surviving young firms is twice as robust.* High-tech and ICT firm formations are becoming increasingly geographically dispersed. As technological advancement allows for the production of high-tech goods and services in a wider set of areas, many regions are catching up. The opposite has been true for the private sector as a whole, where new business growth has been occurring most in regions with already higher rates of new business formation

Sources of Economic Hope: Women's Entrepreneurship

This report suggests that accelerating female entrepreneurship could have the same positive effect on the U.S. economy that the large-scale entry of women into the labor force had during the 20th century. While women represent more than half of the educated U.S. population, they have far lower levels of participation in growth-oriented entrepreneurship than men do. Women-owned businesses account for only about 16 percent of the nation's employer firms and, among high-growth firms, they typically account for fewer than 10 percent of founders

The impact of regional and functional integration on the post-entry performance of knowledge intensive business service firms

Knowledge intensive business service firms (KIBS) are an important element of modern economies and thus attracting increasing interest in scientific research. In the existing literature it is argued that due to the important role of knowledge, innovation and user-producer interaction in the KIBS sector, functional and regional integration are particularly decisive for the firms’ post-entry development. Nevertheless, few existing studies are dealing with questions of entrepreneurship in the KIBS sector using micro firm data. This contribution gives an empirical analysis of the determinants of post-entry performance of KIBS in three German metropolitan regions. Due to the lack of suitable firm micro data, telephone interviews with 547 firm founders have been conducted. By applying multivariate estimation methods it can be shown that functional linkages to knowledge providers, customers and co-operation partners indeed matter for the performance of young KIBS. Regarding regional integration, however, especially a high diversification of spatial reach is proved to be crucial. JEL-Classification: D21, J23, L80, O30 Keywords: Employment growth; Entrepreneurship; Entry; Innovation; Knowledge-intensive business services; Post-entry performance

Innovation across the food chain – the Hungarian case

The small and medium sized enterprises (SMEs) in the Hungarian agri-food sector play determining role. The innovation capacity (efforts, activities and results) however of the individual SMEs is very limited. Food production (including SMEs) has to fulfil food safety requirements in a rapidly increasing extent, which implies a continuous innovation and development process from all market players. In Hungary the agri-food chain had to face a suddenly increased competition especially after the EU enlargement. Based on survey data this paper examines the efforts, activities and results in knowledge acquisition, utilisation, coordination and transfer in the Central Hungarian food SMEs. We have found (using ordered logistic regression) that R&D expenditures, achieved innovations, export/import orientation as well as the networking activity of the SMEs play significant role in market development

Firm Tunrover and the Rate of Macroeconomic Growth - Simulating the Macroeconomic Effects of Schumpeterian Creative Destruction

The positive effects of new innovative entry and fast and efficient allocation of resources are balanced against the efficiency of price signaling in markets in a non-linear micro based simulation model of an Experimentally Organized Economy (EOE). In this model increasingly rapid reallocation of resources over markets, moved by innovative new entry and competitive exit (the rate of firm turnover) generates faster growth in output, but eventually, if too fast, is shown to affect the reliability of price signaling in markets and to raise the frequency of investment mistakes. Beyond a certain level of the rate of firm turnover the aggregate effects at the macro level, therefore, turn negative. This optimal growth trajectory depends on the balance between the rates of entry and exit and on the performance of new firms compared to incumbents, their size compared to incumbents and the variation in the same characteristics.Business Mistakes; Economic Systems Stability; Endogenous Growth; Experimentally Organized Economy (EOE); Firm Turnover

New firm performance and territorial driving forces

The article analyses recent approaches on entry and post-entry performance by new firms, with particular focus on its applicability to small manufacturing firms recently borned in Argentina. The analysis is based on a sample of small firms created in the period 1990-2000 in three intermediate cities in Buenos Aires province (Argentina) in manufacturing sector. The survey collected data about microeconomic and mesoeconomic elements influencing firm performance. Results indicate that tradability is a key factor influencing firm performance. New firms entering markets where the spatial markets are reduced face limited perspectives on expansion. In turn, tradability is also affected by entrepeneurial motivation and, especially in underveloped regions, macroeconomic variables.new firms, post-entry performance, transability

New firm performance and territorial driving forces.

We study post entry performance of manufactuirng firms in 3 municipalities of Buenos Aires province, borned between 1990 and 1999. The aim of the paper is to identify main factors explaining firm growth. The focus is directed to endogenous determinants of firm performance, individual or local as well, taking into account the growing interest those elements are receiving in recent literature about local development. The results show that firm tradability grade is the key variable explaining performance. This factor is strongly influenced by entrepreneur´s profile but also by macroeconomic context.local development, new firms, firm performance, tradability

Indian Pharma Within Global Reach?

The Indian pharmaceutical industry is presently going through a phase of transition and potential consolidation, owing to India's new TRIPS-compliant intellectual property regime and other rules aimed at enhancing the industry's credibility nationally and internationally. Appropriate policy interventions can play a large role in cushioning the transition (and gradual consolidation) of the industry post-2005. Using firm level data collected in 2004-2005, this paper seeks to make two major contributions in this regard. The research findings show that the Indian pharmaceutical sector is a heterogeneous mix of firms with vast differences in innovative capabilities. Based on these differences, the groups can be categorized into specific "innovation modes" (the innovator, the niche operator and the manufacturer), each mode being a step closer towards the innovative pharmaceutical firm. Second, the paper highlights how the emerging strategies of firms in all three groups, although different, underpin the importance of systemic coordination in the pharmaceutical sector. The analysis links both these findings to policies pursued in the pharmaceutical sector over the past four decades and highlights the role of differential innovation policy in ensuring optimal sectoral performance.Pharmaceutical industry, Innovation policy, TRIPS, Intellectual Propery, IPR, Property rights, India

Third-Order Thinking in Science Communication

SYMPOSIUM: Future Science Communication in Japa