News of the activities of large American firms during the current era of economy recovery has communicated stark realties to everyone from policymakers in Washington to many Americans searching for better employment opportunities. A recent Commerce Department report shows that American companies laidoff 2.9 million workers, while increasing employment overseas by 2.4 million. A prime example is that of General Electric. In a recent spotlight, it was revealed that nearly half of its workforce is located overseas and this ostensibly American firm is contributing much less than what was perceived to the tax base of the U.S. The Kauffman Foundation’s Research Series on Firm Formation and Economic Growth indicated that for all but seven years between 1977 and 2005, existing firms have been net job destroyers, losing 1 million net jobs per year. By contrast, in their first year, new firms add an average of 3 million jobs, according to this study.
However, these developments were not news to many of our fellow practitioners in the Economic Development community.
For several years, our emphasis has been directed to supporting the growth of new high-tech firms and start-ups. As economic development practitioners, we are experienced in working with the strategic legacy industries in our geography, whether that legacy is in agriculture, manufacturing, shipping and logistics, scientific, or engineering. New firms in our regions benefit from interaction with like-minded people with similar industry background, not to mention the ability to integrate into existing supply-chains much faster.
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