High-Impact Firms Creating Jobs in South Carolina
A new study by the University of South Carolina’s Moore School of Business shows that 3% of the businesses in the state are responsible for roughly two-thirds of its net new jobs. In addition to those local high-impact firms, the authors found that firms with fewer than 20 employees account for 51 percent of net job generation.
“For years, it has been widely believed that small businesses create nearly all the jobs in the United States. However, recent research suggests something different,” said Dr. Douglas Woodward, economics professor who authored the study along with fellow Moore School economist Dr. Paulo Guimaraes and research analyst Veronica Watson. “New data indicate that it’s actually a small number of fast-growing, locally-based small and medium companies that are responsible for the majority of U.S. employment gains.”
Other principle findings include:
- South Carolina high-impact firms in the professional/technical services and construction-related industries experienced high employment growth.
- Local, high-impact firms (like all firms) are overwhelmingly small businesses (less than 20 employees). Yet, a select group of high-impact firms that are larger than 250 employees have been especially successful in net employment generation.
- Thirty percent of high-impact firm employment are located in traded clusters or regions with concentrations of products and services that are sold. Firms in these clusters tend to pay higher wages and are more innovative. This share in traded clusters is higher than the overall South Carolina and national average share of employment in traded clusters, which is about 27 percent.
- During the 2004-2008 economic expansion, high-impact firms associated with machine tool products, distribution services, plastics, processed metals and automotive products experienced significant employment growth
- High-impact firms are found in all regions of states.