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Focus on Scale-Up, Not Start-Up

Jose Corona of Inner City Advisors urges: to truly transform local neighborhoods, we must shift our attention to invest in enterprise scale, not start-ups, as a long-lasting solution for creating good jobs.
November 23, 2014, 9am PST | Lisa Monetti
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Entrepreneurship, with all its headline-grabbing power, is misunderstood and overstated as a liberatory force when it comes to solving the challenges of economic growth. Start-ups get a lot of love and attention. There’s excitement and intrigue at the outset of a new venture, and the same goes for big buy-outs, acquisitions, and billion-dollar valuations. But the growth that takes place between start-up and exit—the scale—is what matters most right now. We need to look at the entire lifespan of a business, not just the birth, and support entrepreneurs through the most critical stages of growth. We must shift our attention toward scale in order to create and retain good jobs in the long term.

Start-Ups Closing Down at Higher Rate

According to the SBA Office of Advocacy, small businesses, defined as an independent business having fewer than 500 employees, have generated 65 percent (or 9.8 million) of the 15 million net new jobs over the past 17 years. U.S. micro-businesses (one to four employees), many of which are start-ups, created a net of 5.5 million jobs from 2004 to 2010.

It’s clear that start-ups are excellent job creators. But what happens when we zoom in on the survival rate of these firms? What happens when we examine the sustainability of the jobs they create?

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Published on Saturday, November 15, 2014 in Shelterforce Magazine
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