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SBE Lect 3_ Part 3: Ch3.5- Ch4 (LECT 2 (Around 60% of working people work…
SBE Lect 3_ Part 3: Ch3.5- Ch4
Chapter 4
- working in small business
The generation of jobs in small businesses
The quality of these jobs
LECT 2
Around 60% of working people work in SME
However, are SME also generators of employment?
SME most common type of business
Jobs generated
Net jobs = Created jobs – Destructed jobs
Job generation debate
Birch (1979) was a seminal piece of research because he showed that small
businesses were an important source of net jobs
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Job-generating firm is not a large corporation, but a small, independent, and volatile business
However,
two different ways of calculating
depending on if a
static
(the size ‘class’ a business ends up with) or a
dynamic perspective
(what was the size class of the business in the base year) is taken
see slide 13-15 + CALCULATION in appendix slide 14-15
Do small businesses create more jobs?
slide 15-16/32
Small businesses generate butt also lose many jobs
Consensus: There is not much you can do about job loss, so focus on job creation
[Quantity / quality trade-off]
The ‘net’ effect is positive
A focus on SME
Business that grow are often small, because most business are small
Can we identify the growth businesses?
SMEs do not create jobs, because they are small
Politicians do care about job creation
Entrepreneurship policy spending is large: Global estimates are difficult to obtain but The Netherlands provided €7.5 billion in tax advantages for the self-employed (2017), Sweden spent SKK 46.5 billion and the UK spent £10 billion back in 2005
Besides jobs, entrepreneurial firms can meet customer needs and stimulate productivity which ultimately leads to better societal wealth
If governments can play a positive role, social welfare will increase
[Small business owners can vote...]