In a period of sluggish employment growth and disappointing productivity trends in most OECD countries, the central role played by start-ups and young firms in creating jobs and bringing innovations to market acquires renewed importance in the policy debate.
The OECD DynEmp project presents new evidence on the employment dynamics of start-ups and incumbents across more than 20 OECD and non-OECD economies. While entrants disproportionally contribute to job creation in all countries, significant differences exist in the extent to which they manage to do so. As shown in a recent report, these cross country differences can be analysed looking at differences in the job contribution of start-ups at the time of entry, determined by the combination of entry rates and average size at entry; and at differences in the post-entry job creation by start-ups, which in turn depends on the post-entry growth and survival rate.
The latest DynEmp report also suggests that national policies and framework conditions are likely to explain some of these differences. Policy failures appear to hamper significantly more start-ups than incumbents, especially in the most risky and volatile sectors, as well as in sectors that are more financially dependent.
The first phase of the project (DynEmp Express) led to the collection of a new database based on firm-level sources which presents a detailed portrait of the business structure and dynamics of 17 OECD countries plus Brazil over the period 2001-11.
A number of significant extensions are implemented in the new phase of the project entitled DynEmp v.2. First, the DynEmp network has been expanded to include several additional economies. Second, DynEmp v.2 now includes a more disaggregated analysis of transition dynamics allowing for the investigation of start-up dynamics in greater depth. Third, the dataset allows for a more granular analysis at the 2-digit sectoral level.
The main findings of the project are:
The DynEmp project is developed under the aegis of the OECD Committee on Industry, Innovation and Entrepreneurship and the Working Party on Industry Analysis, with the invaluable support of the DynEmp network