Job Creation After the Crisis

The role of SME and Entrepreneurship

Peter Vikström, PhDDirector Entrepreneurship and Enterprise

Washington 30 october 2009

Introduction

• The current crisis poses challenges on policymakers to stabilize the labour market and foster job creation

• Challenges for policymakers to handle in order to create jobs and sustainable growth– What is necessary apart from macro-economic stabilization?

• This presentation will depart from a European and specifically Swedish perspective– A small open economy– An internationalised business sector

Contribution of SME:s to the European EconomyRate of change 2004-2006, EU27

Source: Eurostat

Job Creation in SME:s in EU CountriesNumber of persons employed, rate of change 2004-2006

Source: Eurostat (2009)

Employment in SMEs 1993-2008

Source: Statistics Sweden (SCB)

Index 1993=100

80

90

100

110

120

130

140

150

160

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Ind

ex (

1993

=100

)

1-19 20-49 50-199 200-499 500- TOT

Importance of High-growth Firms

Source: SCB, Own calculations

Number of jobs created per size class in each three-year period

-60000

-40000

-20000

0

20000

40000

60000

1997-2000 1998-2001 1999-2002 2000-2003 2001-2004 2002-2005 2003-2006 2004-2007

G3-19 G20-49 G50-249 G250- Non-Growth Firms

Stylized Facts for High-growth Firms

• Younger than other firms• Exist in all size classes, even if SME:s are

overrepresented• Exist in all branches, overrepresented in business

services• More capital intensive• More knowledge intensive – higher educational level

Job Creation - Challenges for Policymakers

• Stimulating innovative entrepreneurship • Enabling growth oriented firms

– Access to finance– Committment to open markets and reducing barriers to trade– Reforming the regulatory framework

• Competetiveness on the national and regional level

The Growth TriangleEntrepreneurship

Innovations Competetiveregions