Regional variations in new firm job creation: The contribution of high growth start-ups

Ron Botham and Andrew Graves

Local Economy, 2011, vol. 26, issue 2, 95-107

Abstract: Much existing work argues that a small number of high growth start-ups create the majority of new firm jobs; that policies aiming to increase the volume (i.e. number) of start-ups in the UK’s less entrepreneurial regions may adversely affect their growth or quality; and, therefore, policy should target high growth new starts. To test these arguments, a database of all UK independent limited companies set up between 2001 and 2005 still operating in 2008 was constructed and analysed. In 2008 there were 351,000 such start-ups with 1.51 m employees. Defining high growth as firms with over 24 employees in 2008, high growth start-ups did not create the majority of new firm jobs and the ‘job creation problem’ in the UK’s less entrepreneurial regions is too few start-ups rather than a relative absence of high growth start-ups. Consequently, in the UK’s less entrepreneurial regions policy should aim to increase the volume of start-ups.

Keywords: business start-ups; business support; employment growth; high growth firms; new firms; regional development; regional policy; small firms (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:loceco:v:26:y:2011:i:2:p:95-107

DOI: 10.1177/0269094210397849

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