My Kauffman colleague E.J. Reedy wrote an insightful post at Data Maven on Carl Bialik's somewhat disappointing Numbers Guy column over the weekend about job creation by small business. These come on the heels of Charles Kenny's well-done essay in Bloomberg Businessweek about the various nuances involved in counting job creation by business size and the distortions that often arise.
We continue to do research and analysis on these issues--one of the exciting things about entrepreneurship research is that every time we learn something new, we realize how much there remains to understand. What's clear, and what E.J. underscores, is that we should not be satisfied with aggregate data. They help us penetrate to one level of understanding, but aggregate data also introduce another slew of distortions and obscurities. E.J. pointed out that firm age and local/non-local are two important distinctions. I would also add the sectoral lens--the more time I spend with the numbers the more I'm convinced that sectoral breakdowns explain a significant share of what we see in terms of new and young businesses, small businesses, job creation, and churn. There is still quite a bit of work to do, however, and I'm happy to disprove my own hypothesis.
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