So, Who Actually Creates Jobs?

Policymakers often think of small business as the employment engine of the economy. But when it comes to job-creating power, it's not just the size of the business that matters as much as it's the age. Figuring out where new jobs actually do come from has become a serious preoccupation of progressive policy makers across the world. In the U.S., for instance, serious work is being done by organisations like Kauffman Foundation and the Institute for Competitiveness & Prosperity to get a better handle on who creates jobs. Their latest research is clear and reveals some surprising truths. Over the last twenty five years, almost all of the private sector jobs in the U.S. have been created by businesses less than five years old. The younger companies are, the more jobs they create, regardless of their size. Conversely, existing companies are shown to be net job destroyers, losing 1 million jobs net combined per year between 1977 and 2005. Simply put, young companies are the primary source of job creation in the economy. Not only that, but young companies also contribute to economic dynamism by injecting competition into markets and spurring innovation (think Uber). Surely then, it's an imperative for African countries to foster an ecosystem that supports business startups, making it easy for young businesses to get off the ground. So they can do what they're best at - creating jobs.