How many new billion dollar firms would it take to permanently increase the U.S. GDP by one percentage point? A new Kauffman Foundation study estimates the answer is most likely between 30 and 60. According to Inventive Billion Dollar Firms: A Faster Way to Grow?, the collective impact from high-growth firms that are able to realize $1 billion in revenue could significantly accelerate the U.S. economic recovery, and over time increase income and wealth of the average American household.
According to Robert Litan, Kauffman Foundation’s vice president for research and policy and author of the study, the potential economic impacts demonstrate that if the economy grew at 4 percent annually rather than the average of 3 percent, GDP would double six years faster (18 versus 24 years). With compounding, this extra 1 percent would cumulate over a century to produce roughly three times the level of GDP than would otherwise exist.
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