Growth and Entrepenuership
Quick: what percent of the U.S. manufacturing workforce labors in workplaces of twenty employees or less. What percent of all workers are self-employed?
No idea? Here’s some help.
- 18 percent of the British manufacturing workforce labors in small firms, and 15 percent of all workers are self-employed.
- 13 percent of the German manufacturing workforce labors in small firms, and 12 percent of all workers are self-employed.
- 31 percent of the Italian manufacturing workforce labors in small firms, and 26 percent of all workers are self-employed.
- 18 percent of the French manufacturing workforce labors in small firms, and 9 percent of all workers are self-employed.
Answers follow the jump.
According to a new study, seven percent of U.S. workers are self-employed, and eleven percent of manufacturing workers are at small firms. The US, contrary to common belief, is not a nation of small businesses. We’re basically last in small-business employment, research, and enterprise among the sample of countries studied.
This finding leads me to question the common claim that the large-firm, Delaware-centric, focus of corporate law scholarship and teaching ignores the real world. To the extent that most employees are found at larger firms, and (compared to other countries) our economy is not really founded on small firm development, the relative paucity of law about the governance of small firms makes some sense.
Now this isn’t to say that economic growth theory ought to focus on established, larger firms. This summer, I was at a conference in which I heard the claim that a very, very small number of new firms (less than 100) drive most of economic growth in the country. Studies of entrepreneurship, if this theory holds, ought to focus on increasing the number of these small, high-growth firms by figuring out what makes them tick. Doctrinal reforms (tort, tax, etc.) might be crucial.
That data supporting such a focus on exceptionally high-growth small firms feels weak to me. The best case I can see is anecdotal, and summed in this video about the explosive growth in social media. And to think, social media is all about men checking out pictures of women. Warning: before starting the video, turn off your sound. It will be mildly less irritating.