National and Regional Perspectives
Edited by Michael Fritsch
Chapter 6: High-Impact Firms: Gazelles Revisited
Zoltan J. Acs INTRODUCTION One aspect of Birch’s work that is especially interesting focuses on the classification of different types (ages and sizes) of establishments. This focus yielded the findings on job creation for which he is best known. Birch finds that ‘Of all the net new jobs created in our sample of 5.6 million businesses between 1969 and 1976, two-thirds were created by firms with 20 or fewer employees’ (Birch, 1981, 7). Between 1976 and 1982, firms with fewer than 100 employees created 82 percent of the jobs. Birch goes on to say, ‘Another distinguishing characteristic of job replacers is their youth. About 80 percent of the replacement jobs are created by establishments four years old or younger’. Finally, ‘Whatever they are doing, however, large firms are no longer the major providers of new jobs for Americans’ (p. 8).1 In 1994, Birch suggested that perhaps it is not large or small firms that are important for job growth but gazelles. One conclusion was that the distinction between small and large firms as job creators is of less importance – most jobs are created by gazelles, which are firms that are neither large nor small. ‘These gazelles move between small and large quickly – at various times in either direction – and to classify them by their size is to miss their unique characteristics: great innovation and rapid job growth’ (Birch and Medoff, 1994, 163). A conclusion of the Birch and Medoff study was that a small number (4 percent) of ongoing...
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