The Mississippi State University Extension published a report recently that looks at what types of businesses, in terms of age and size, the state should seek to attract and retain in hopes contributing to the labor market.
The report, using Census Bureau data, analyzes the debate in regard to courting new large firms into the region or assist existing small firms. It delves into the economic contributions of different types of business establishments in the market, identifying types of businesses that should get the most attention.
According to the report, entitled Business Employment by Age and Size of Firms in Mississippi, older businesses are Mississippi’s main source of employment. Businesses older than five years supported 80% of jobs in 2020.
Businesses with an establishment age between 11-25 years accounted for 35% of businesses supporting 40% of jobs in 2020, while businesses older than 25 years represented 18% of businesses supporting 1 out of 4 jobs.
Startups, or those under one year, supported just 3% of jobs. However, startups generated 28% of new jobs in the past 12 months. This indicates that the entry of new businesses is essential in creating new employment opportunities.
MSU’s report also notes that 58% of businesses in urban areas are 11 years or older while 50% of businesses in rural areas are of similar age.
A slightly higher percentage of younger businesses – under 5 years – are concentrated in rural areas (33%) compared to urban areas (27%)/
The report concludes that larger and mature businesses are the major sources of jobs while smaller and younger establishments are job creators. Thus, “helping establishments survive is vital to the ... regional economy.”
But, encouraging entrepreneurship is important to bolster the economy and accelerate economic growth.
Therefore, urban and rural communities may need different strategies for helping businesses foster a vibrant economy and maintain a resilient labor market. (Mississippi Tribune 06/28/23) Assisting older businesses, encouraging startups vital to resilient Mississippi labor market, economic growth - Magnolia Tribune
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