Small Business Generates Growth

Tell all the truth but tell it slant, success in circuit lies. Too bright for our infirm delight, the truth´s superb surprise. – Emily Dickinson

An article in the Wall Street Journal today presents research made at the University of Chicago, which finds that a small number of startups in the US economy has had the biggest impact on economic growth and job creation. The illustration below speaks for itself.

We all want small companies to take us back quickly to pre-recession employment levels. But policy makers globally need to try to temper those expectations of quick results, because economic growth and job creation are, in large part, self-fulfilling prophecies.

If our unrealistically high expectations leave us disappointed by decent, but not stellar, small business job creation, consumers and businesses may lack confidence and cut back, in fact limiting job creation. Economic growth is about perception and belief in it happening.

Wall Street Journal - 2012-11-13

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