Kauffman Foundation Research Series: Firm Formation and Economic Growth - High-Growth Firms and the Future of the American Economy - March 2010 - Dane Stangler

Oct 15, 2026

Uploaded by Jake

Report analyzes how firm formation and, specifically, high-growth startups (“gazelles”) influence U.S. job creation and long-run economic recovery. Using newly tabulated Census Bureau data derived from the Business Dynamics Statistics database, it shows that the top 1% of firms generate about 40% of new jobs while less than 1% of fast-growing young firms produce about 10%. It discusses policy directions to remove barriers, shape taxation and regulation, expand capital access, and target immigrant entrepreneurs and universities.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages16

Reading Time40 min

AccessFree to download

Introduction

Job creation and economic recovery context

High-growth firms (“gazelles”) and job creation shares

Policy recommendations to increase gazelle formation

Kauffman Foundation Research Series: Firm Formation and Economic Growth High-Growth Firmsand the Future of the American Economy March 2010 Dane Stangler Ewing Marion Kauffman Foundation Dane Stangler is a senior analyst at the Ewing Marion Kauffman Foundation. The author would like to thank Dan Begley-Groth, Paul Kedrosky, Robert Litan, Lesa Mitchell, Munro Richardson, and Carl Schramm, as well as Javier Miranda and Ron Jarmin at the U.S. Census Bureau. ©2010 by the Ewing Marion Kauffman Foundation. All rights reserved. Kauffman Foundation Research Series: Firm Formation and Economic Growth High-Growth Firmsand the Future of the American Economy March 2010 Dane Stangler Ewing Marion Kauffman Foundation I n t r o d u c t i o n | Abstract
Into early 2010, more than two years after the recession began, the American economy continues to send out mixed signals with respect to economic recovery: GDP growth looks set to recover, while unemployment is projected to remain high for many more years. The most important economic matter facing the country is job creation, not only in terms of employment itself but also for boosting sectors such as housing, which will not fully recover until job creation recovers.
Discussions about jump-starting the U. S. economy—both from policymakers and pundits—primarily focus on measures that would expand job growth in existing companies. This report, the third in the Kauffman Foundation Research Series on Firm Formation and Economic Growth, draws on a new set of data, a special tabulation conducted by the Census Bureau at the request of the Ewing Marion Kauffman Foundation, calculated from the Business Dynamics Statistics (BDS) database.
While previous research has emphasized the importance of new and young companies to job creation overall, this paper focuses on high-growth firms—the so-called “gazelles” that, despite their relatively small numbers, nonetheless account for a disproportionate share of job creation.
The data generally show that:
In any given year, the top-performing 1 percent of firms generate roughly 40 percent of new job creation.
Fast-growing young firms, comprising less than
1 percent of all companies, generate roughly 10 percent of new jobs in any given year.
This paper examines the relevance of these points in the national discussion on job creation. When the current conversation turns to small business as an instigator in economic growth, it still emphasizes existing firms. But a new discussion—one that not only promotes entrepreneurship, but, specifically, high-growth entrepreneurship—is necessary, because top-performing companies are the most fruitful source of new jobs and offer the economy’s best hope for recovery.
Finally, this paper recommends strategies policymakers could follow to facilitate the creation | and growth of more gazelle companies:
• Remove barriers that potentially block the emergence of high-growth companies.
• Focus on taxation, regulation, immigration, access to capital, and academic commercialization.
• Target immigrant entrepreneurs and universities, which may be likely sources for high-growth firms.
Introduction
In the near term, over the next several quartersand next few years, the United States economy will recover from the Great Recession of 2007–2009. Or, at least, the headline statistics will indicate recovery. Gross domestic product will grow by perhaps 3 percent to 4 percent per year (if we’re lucky); industrial production will expand; consumer confidence will continue to rise; and corporate profitability will return.
On a longer time horizon, however, beneath these aggregate measures—out there in the “real”economy lived and made manifest by millions of individuals—economic health may not be so quick to return. The unemployment rate peaked at
10.2 percent in 2009 and already had fallen to
9.7 percent by early 2010, but according to even optimistic projections, unemployme

FAQs

What problem does the report focus on regarding the American economy in early 2010?

It focuses on the mismatch between signs of macroeconomic recovery and the continued need for job creation, since unemployment and labor-market distress are expected to persist.

How does the report define “gazelles” and what is their role?

“Gazelles” are high-growth firms that are relatively few in number but account for a disproportionate share of job creation.

What strategies does the report recommend for policymakers to foster more high-growth firms?

It recommends removing barriers to high-growth emergence, focusing on taxation and regulation alongside immigration, capital access, and academic commercialization, and targeting immigrant entrepreneurs and universities likely to generate high-growth firms.

Oct 15, 2026

Uploaded by Jake