Employment creation in small technological and design innovators in the UK during the 1980s

This paper provides rare empirical evidence on employment creation by innovative small firms in the U.K. over the eleven years between 1980 and 1991. Drawing on a database of firms which were recognised as having introduced important innovations, the paper examines the extent of employment growth in these companies and compares their growth with that discovered by other studies of small firms in the U.K. This shows that the innovative firms have grown at a significantly faster average rate than small firms generally. Some of the factors associated with employment change in small firms are assessed. This shows that the initial size, age, sector of activity and type of innovation introduced by the firms were all associated with differences in their average rate of growth. The employment created was, however, highly concentrated in a few firms, but even the fastest growing of these companies (directly) created hundreds rather than thousands of new jobs over the period of analysis.