Exploring the incidence and spatial distribution of high growth firms in the UK and their contribution to job creation

Michael Anyadike-Danes, Karen Bonner, Mark Hart

Nesta Working Paper 13/05
Issued: December 2012
JEL Classification: F23, L25, L26, L53, R12
Keywords: High growth firms, job creation

Abstract

High growth firms have been attracting increasing attention from policymakers interested in promoting job growth. Researchers have responded by exploiting newly available large firm-level datasets to study the role of high growth firms in the dynamics of job creation and destruction. This paper uses the recently agreed OECD definition of a high growth firm - requiring sustained growth in employment, averaging 20 per cent per year over three  years - to provide benchmark numbers on high growth firms for the UK compiled from the ONS Business Structure Database over the period from 1997 to 2010.

It reports counts of high growth firms and measures of incidence (high growth firm numbers relative to the size of the business population) across a set of characteristics: age; size; industrial sector; and location. It concludes with an investigation of job growth which confirms that in the UK high growth firms are, indeed, disproportionately prolific job creators.

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