Jobs created by "everyday businesses"

Brazil Initiates Program To Eradicate MalnutritionLast year I posted a discussion on this site about the so-called “growth-oriented” enterprises and questioned whether policy makers are able to identify these firms before they grow. This topic has recently been revisited by the UK-based RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) in a blog by Benedict Dellot entitled: “Yes, high growth firms create the most jobs. But it’s the everyday businesses that provide work for those who need it most”.

Dellot’s post reflects the growing political interest in small business in Britain and highlights the finding of Nesta (the UK-based National Endowment for Science, Technology and the Arts), which shows that only a very small percentage of firms are responsible for significant job creation. There is nothing new in these findings. The challenge is how to respond. Do we, as the recent Nesta blog argues, improve the targeting of business support?

The challenge then is identifying those young businesses that will survive and grow. What the data tells us here is that growth is strongly related to how innovative a business is and how skilled their workforce is. These are the businesses that have the ambition and ability to grow into large businesses and can make significant contributions to growing employment in the UK.

This is all well and good, but as I’ve argued before, it is extremely difficult to do this. While there is much benefit to be gained in improving the ways business development and job creation programmes operate, my money is on creating the conditions in which enterprises flourish. In these circumstances, we become less concerned with the ephemeral task of picking a future winner and more concerned with helping those who are growth-oriented and have an entrepreneurial flair to realise their ambitions.

I like Dellot’s conclusion:

So while yes, we should acknowledge and seek to support the fastest growing firms, let’s not forget the everyday businesses that provide opportunities to those who most need them.