High-Impact Firms Create Jobs in Illinois
Posted on August 12, 2008
The Office of Advocacy of the U.S. Small Business Administration recently released a study concluding that high-impact firms create the most Illinois jobs and growth.
Of the 376,604 high-impact firms nationwide, 13,443 are located in Illinois. That means 2.21 percent of all Illinois firms are high-impact firms. According to the United States Department of Labor Bureau of Labor Statistics, Illinois employed a total of 5,993,900 people in June 2008, a .1 percent increase from last year.
In the study, a high-impact firm is defined as one whose sales have at least doubled over a four-year period and whose employment has a growth quantifier of two or more. A growth quantifier is defined as the firm’s absolute change in employment multiplied by the percent change.
The study notes that high-impact firms account for almost all employment and revenue growth in the national economy, according to a Reuters article.
“High-impact firms are important to Illinois’ economic growth and development,” Dr. Chad Moutray, chief economist for the Office of Advocacy, said in the article. “State policy makers would be wise to consider how their policies can encourage such firms.”
The study notes that high-impact firms are found in all industries and all geographic regions. The study ranked regions, states, metropolitan statistical areas, and counties by their percentage of high-impact firms, and found that, with some data limitations, high-impact firms are usually not start-ups, but are on average around 25 years old, and come in all size classes. The report also documents how over the periods studied, nearly all job losses came from large, low-impact firms.
The Office of Advocacy examines the role and status of small business in the economy and independently reports its views to federal agencies, Congress and the president.