In a period of sluggish employment growth and slow-growing productivity in most OECD countries, the central role played by start-ups and young firms in creating jobs and bringing innovation to the market becomes increasingly important in policy debates.
Monitoring & Analysing Business Dynamism during the COVID-19 pandemic
Analysis: Timely Trends in Business Dynamics Up to January 2022 – Joint analytical note by STI and SDD economists
Business dynamics, start-ups and job creation
While market entrants have a disproportionally large contribution to job creation in all countries, significant differences exist in the extent to which they do so. Cross-country differences can be analysed by looking at differences in job contribution by start-ups at the time of entry, determined by entry rates and average size at entry; and by looking at differences in post-entry job creation by start-ups, which in turn depends on post-entry growth and the survival rate for new firms.
The report "No Country for Young Firms? Start-up dynamics and national policies" suggests that national policies and framework conditions are likely to explain some of these differences. Policy failures appear more detrimental to start-ups than to incumbents, especially in the riskiest and most volatile sectors.
Policy note (pdf)
The DynEmp project and data
The core DynEmp3 cross-country database provides a detailed portrait of the business structure and dynamics of 16 OECD countries plus Brazil and Costa Rica over the period 2001-2015. Since the first DynEmp data collection in 2013, there have been a number of refinements and additions to the collection, including the ability to track firm performance over time, the possibility to include information on ownership and trade status, a distinction between truly new firms and entry associated with mergers and acquisitions, and a focus on ICT sectors. Additional modules have been explored which study employment dynamics at the regional and local level, and provide a simplified version of the analysis suitable for countries without longitudinally-linked firm data. The database continues to be updated as new data becomes available and as additional countries join the DynEmp network.
DynEmp data is collected by the OECD through a network of affiliated researchers and national statistical offices with access to confidential, firm-level research data for a single country. The OECD provides code to harmonise differences in the data across countries, and to generate an analysis dataset capturing the dynamics and dispersion of employment across highly disaggregated groups of firms, by age, size, and industry. Local researchers and statistical agencies then apply the necessary steps to ensure that outputs meet specific confidentiality requirements and return the secure, micro-aggregated results to the OECD for analysis.
Current research within the DynEmp project focuses on documenting the trends and explaining the observed reduction in business dynamism across OECD countries over the last two decades, and examining the quality and inclusiveness of job created by young firms.
Research and Analysis
Co-funded by the Horizon 2020
Research and Innovation Programme of the European Union
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 811181.
The European Commission is not responsible for any use that may be made of the information produced by the project.