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United States

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  • Business creation and employment
    17 May 2011, by Bernard Zimmern

    In the late 70s, an MIT researcher shook the whole world of economists by showing that large firms, those that make the media buzz, those who made the Fortune Magazine cover page, does not create jobs but lose them and that employment is created primarily by small companies and even the very small.
    When David Birch invented the new discipline of business demography, he was not arguing that large companies do not create jobs but as a category, they destroy more jobs than they create. (...)

  • France : Twice less businesses, three times less employment created than in Germany
    26 May 2011, by Rose Blackburry

    Is this the best kept statistical secret in France? These figures are not found on Eurostat where newly created businesses and jobs appear similar for France and Germany.
    On the contrary, French official statements celebrate the success of start-ups creation without taking into consideration that almost all companies being created are without employee, so that we do not know whether these companies are empty shells.
    To avoid this, several international statistics agencies, including (...)

  • «The importance of startups in job creation and job destruction»
    26 May 2011, by Rose Blackburry

    Job creation and destruction in the US have been studied by Haltiwanger et al using Census Bureau longitudinal data and show a rate of job creation that is around 18% of existing jobs with job destructions around 16%, leaving a net creation of around 2%.
    Using time series from 1977, they were able to show that startups created «3 million jobs per year during 1992–2005, four times higher than any other yearly firm age group. For comparison, there are an average of 800,000 jobs created at (...)

  • Reagan’s reform of 1986, tax loopholes and entrepreneurship
    16 June 2011, by Rose Blackburry

    The impact of tax legislation on start-ups birth as well as the weight of tax loopholes is dramatically illustrated by the Reagan’s reforms of 1986.
    U.S. investors are no more risk takers than others and react rationally to changes in tax legislation.
    Investments in start-ups are extremely sensitive to tax incentives: as taxes have taken with time a larger share of expected gains, maintaining a sufficient rate of start-up creation requires the government to balance by reducing the (...)

  • USA: Employment in start-ups depends strongly on the initial size
    23 September 2011, by Emmanuel Darche

    During the recent financial crisis, many redundancy plans occurred in France: Molex, Caterpillar, Goodyear ... Job destructions, often by hundreds, are indeed frightening. But the media coverage of these social plans and their related conflicts, should not obscure the fact that jobs destruction are taking place by thousands whatever the economic environment, and, at the same time there are also jobs creation by thousands. What is the balance of jobs creation and destruction? And what are (...)

  • Business Angels
    27 May 2011, by Bernard Zimmern

    Venture Capital and the birth of the Business Angels
    The term Business Angels (BA) was created around 1985 by Professor William Wetzel, University of New Hampshire, USA. It is indeed in the preceding years, during the 60’s and the 70’s, that BA have expanded in the USA under the effects of a law passed in 1958 by the US Congress aware of the funding problems of start-ups: the Small Business Investment Act.
    This law aims to encourage individuals to invest in start-ups creation. As shown (...)

  • Funding and firm creation
    17 May 2011, by Bernard Zimmern

    Companies created by necessity and companies created by opportunity
    In order to create a company, you need cash to allow the company to survive at least for the sales to balance the expenditures.
    That is why most of the companies are created without employee, with minimum fixed costs. But they create few or no jobs, managing, but not all, to feed their creator. Following a categorization given by the Global Entrepreneurship Monitor (GEM), one has to distinguish companies created by (...)

  • David Birch and firm demography
    26 May 2011, by Bernard Zimmern

    Firm Demography (DEME) acquired fame in the late ’70s with the work of David Birch who made headlines by showing that jobs were not created by large companies listed in Fortune magazine as one believed at the time, but rather by a myriad of small and micro enterprises. He relied on Dunn and Bradstreet database identifying million U.S. businesses. Thanks to computers and his training as a nuclear physicist, he brought numbers into a world hitherto remained very qualitative.
    Birch was a (...)

  • Share of the Hi-Tech industry in the US economy: 4.5% of the total american employment, 10.5% of its growth only
    26 May 2011, by Rose Blackburry

    The Digital Economy Association shows, in 2006, nearly 3 million jobs in information and communications industry, about the same level as in 1997. Moreover, adding technologically innovative sectors such as chemistry, medicine, electronics, etc. the total share of technologically innovative industries (high tech) represents less than 5% of total existing jobs in the United States.
    The low weight of the hi-tech industry in the United States is also reflected in the U.S. Bureau of Labor (...)

  • «Estimating entrepreneurial jobs — Business creation is job creation»
    26 May 2011

    Abstract
    «This paper distinguishes two kinds of jobs in the process of business creation. One is the “employment job” offered by an employer to an employee through a contractual (paid) relationship. The other is the “entrepreneurial job” created by active business owners for themselves. Only a small proportion of salaried entrepreneurial jobs are included in official employment statistics. To estimate the scale of entrepreneurial jobs, this paper examines mainly three databases—the Panel (...)