ENTREPRENEURSHIP, GROWTH AND THE HIGH IMPACT FIRMS IN REGIONS
With the impact of the recent global economic crisis having the combined negative effect of increasing levels of unemployment and falling aggregate demand, it is important to understand how, where and why entrepreneurial firms are able to turn the tide by creating prospects of growth and development. This paper is concerned with existing, entrepreneurial and ‘high-impact firms’ by which we mean firms that generate ‘both’ disproportionate levels of jobs and sales, and those which have high levels of innovative activity (Acs, Parson’s and Tracy, 2008). Entrepreneurial firms create and realise opportunities which are critical for the economy. However, constrained economic circumstances can limit the creation of new start –ups (Cohen and Levin, 1989) and the attention switches to those firms which are able to overcome the odds of recessionary conditions through new combinations of resources, ingenuity and the optimisation of creative relationships between ends and means in uncertain environments (Bhide, 2008). We investigate, in particular, ‘where’ (‘spaces’ or specific regions) such instances occur and attempt to explain why they do so in these specific circumstances. We ask whether such regions, as distinctive geographical spaces, are delinked from the rest of the political and economic make up of the nation state to which they belong. We also investigate the special features which enable firms to achieve both high levels of employment and sales growth in those regions. The pioneering contribution on the role of firms, especially small ones, in the creation new jobs that impact on the economy can be traced back to the seminal contributions of David Birch (Birch, 1979; Birch and Medoff, 1994). Beginning in the 1970s, Birch (1979) found that on average, about 60 percent of all jobs in the US can be attributed to firms with 20 or less employees, and about 50 percent of all jobs were generated by independent small entrepreneurs (Birch, 1979). Later in the 1990s, Birch also found that most employment growth is generated by fast growing firms, which he called “gazelles. In recent years, building on Birch’s work on gazelles, another notable breakthrough was achieved in the work of Acs, Parson’s and Tracy (2008) who modify the concept of ‘gazelles’ in a way that broadens the analysis of rapidly growing firms. While Birch’s definition of gazelles was based on their revenue growth, Acs, Parson’s and Tracy (2008) examined firms with not only significant revenue growth but also expanding employment. They found that in the USA, high-impact firms account for almost all employment and revenue growth in the economy. Job creation by high-impact firms over the 12-year period they studied was 58 percent in small firms. These findings for the most part reinforce Birch’s conclusions that rapidly growing firms, especially small ones are crucial engines of job creation. Thus, many scholars strongly advocate the position that a small group of high growth SMEs are the main job creators in the US and UK (Birch and Medoff, 1994; Storey, 1994; Acs, 2008). However, despite the significant contribution that the work referred to above has made to the study of the nature of rapidly growing firms, our understanding of high growth firms, especially firms that generate ‘both’ disproportionate levels of sales and employment (Acs, Parsons and Tracy, 2008) remains unsatisfactory for at least three key reasons: a) existing studies on high impact firms do not allow us to understand whether firms with ‘both’ employment and sales growth also exhibit entrepreneurial characteristics, especially in terms of new product and services and the organisation necessary to develop them, or innovation (Acs and Audrestsch, 2005). Addressing this crucial issue allows us to understand whether the generation of high impact firms is contingent on innovation, thereby giving us direction as to key factors to focus on in developing high impact firms; b) previous studies on high impact firms have investigated only in a limited way that there are certain regional factors that influence the concentration of high impact firms in specific regions. This is particularly important especially at a time when economic policies for employment generation appear, increasingly, to be influenced by regional factors; and c) existing studies on high impact firms also do not tell us whether high impact firms are generated by indigenous or foreign owners. Such information could also help provide direction for policies on the generation of firms with both employment and sales growth by allowing policy makers to understand whether or not attracting foreign firms can play a crucial part in the generation of high impact firms. In his paper, we attempt to bridge the gaps referred to above by adopting Acs, Parson and Tracy’s (2008) definition of high impact firms (i.e. by focussing on firms with both positive growth employment and sales). We attempt to integrate the literature on high impact firms with that of geography of innovation (Feldman and Florida, 1994; Acs, 2002). This allows us to examine the geography of high impact firms. We build on Acs and Audretsch’s (1990) observation of the co-existence of innovative small and large firms in specific sectors, by exploring the regional dimension of such forms of co-existence. Specifically, we examine whether there are differences in the way small, medium and large manufacturing and service firms generate positive sales and employment growth in particular regions and enquire into the significance of the spatial factor, especially in terms of the human capital available in those regions. Finally we also investigate whether there is a bias in foreign or indigenous ownership of these small, medium and large high impact entrepreneurial firms. The study is based on multiple regression and descriptive analysis of data drawn from United Kingdom (UK) Innovation Scoreboard. The Innovation Scoreboard is a league table of the companies in UK investing most in R&D. The advantage of employing data from the score board is that it uniquely provides firm level data on both employment and sales growth of companies of various sizes and regions but also effort towards innovative activities (R&D). These thus provide a unique data set that allows for critical analysis of firms generating both employment and sales growth. We analyse the data both at the UK national and regional levels in order to critically examine the spatial factors that influence the location of high impact firms. In terms of appropriate choice of regional level of analysis, the UK regional governments with Regional Development Agencies (RDA) are employed. The United Kingdom RDA is chosen for a number of reasons: a) the UK has an increased emphasis on the RDAs’ role in stimulating economic development as they are charged with promoting employment (House of Commons, 2002); and b) data on firm level 4 year growth rates for both employment and sales are available at the RDA regional level from the innovation scoreboard data (UK Innovation Scoreboard, 2008). The primary research period of our paper is 2004-2008. By studying four year growth rates, we are able to compare firms of various sizes (small, medium and large) and different sectors (manufacturing and services) over the same period of time thus reducing difficulty of comparing historic with current data; 3) Data is also available on various regional factors at the RDA level that allows for a critical analysis of those key factors and how they are associated with the location of high impact firms (Adams and Smith, 2004; NOMIS). The analysis of our findings and our concluding observations offer fresh insights into specific, spatial factors affecting a region’s capacity to generate high impact firms. They also offer critical insights as to whether high impact firms are generated by indigenous or foreign owners. This study makes several contributions to the literature on high impact firms (Acs, Parsons and Tracy, 2008) from geography of innovation perspective (Audretsch, 1998; Acs, 2002). To the best of our knowledge, this study serves as the first attempt to identify the geographic factors associated with the local concentration of firms that generate ‘both’ disproportionate levels of employment and sales. It is also likely the first study to identify whether high impact firms are generated by indigenous or foreign owners. Thus, this study not only extends previous work on high impact firms (Acs, Parsons and Tracy, 2008) but also offers fresh insights that have potential implications for local and national policies on job creation, firm growth and supporting the concentration of firms in specific spaces. The implications and value of our work lie in providing direction for both theory and policy in understanding factors influencing the generation of both disproportionate levels of jobs and sales; which is beneficial especially under circumstances where many firms are shedding their work force as they struggle for survival in recessionary times.
Small firms Large firms Growth Entrepreneurship Innovation Regions
Jay Mitra Yazid A. Abubakar
Centre for Entrepreneurship Research Essex Business School, University of Essex, Elmer Approach, Southend-on-Sea SS1 1LW United Kingdom
国际会议
Academy of Innovation and Entrepreneurship 2010(2010创新与创业国际学术会议)
北京
英文
43-60
2010-07-09（万方平台首次上网日期，不代表论文的发表时间）