Where Will The Jobs Come From? Part II
Government, government departments and a range of development agencies work hard to support the creation of jobs across the economy.
Supporting the development of new jobs is of major concern to all political parties and plays a key role in their policy documents.
There is a view that all small businesses should be supported as they create the majority of jobs in the economy.
The difficulty with this view is that although many jobs are created by small businesses many jobs are also lost within the small business sector.
The key issue appears to be not so much the number of jobs created or lost but the net number of jobs that remain in the economy.
The difficulty with addressing such a key issue arises when the commitment of government to support small businesses lacks the insight necessary to support them in a way that creates net new jobs.
The matter is further complicated by the fact that small businesses play a broader and vital role in the economy and in sustaining local communities.
As a result, there is a tendency by government and its agencies to offer general support to all small businesses in an attempt to create jobs.
The challenge, however, is that such support doesn’t effectively address the core issue of how to increase the number of net jobs in the economy.
In order to effectively address the matter it is necessary to identify the businesses that are likely to grow, as they will create the greatest number of jobs.
Interestingly, researchers have identified the businesses most likely to grow as younger businesses rather than simply all small businesses.
As a result, government policy needs to support the creation of more start-up businesses, as some of them in their early years will develop into the growth businesses that create the majority of jobs.
The remaining challenge lies in the need to identify why and how some young companies make the transition to growth companies while many do not.
Once the link between start-up and growth companies is better understood government support can be directed in a more effective way to help create jobs.
SO, while there is agreement that supporting start-up and small businesses is good for the economy there is a need for government to better understand how jobs are actually created within the economy.
What do you think? Where will the jobs come from? Get in touch, we would love to hear your views contact Nick on 028 8224 9494 or via Twitter @nick_oec.
