Would you be surprised to learn that less than 1 percent of all businesses in Pennsylvania created almost every new job throughout the commonwealth?
That’s exactly the impact that about 2,300 high-growth companies had on the state, according to research by economic development consultant Dr. Gary Kunkle. His examination of Pennsylvania’s economy found that these businesses — affectionately referred to as “higros” — generated almost 60,000 new jobs between 2006 and 2009. Out of 757,000 businesses in Pennsylvania, 0.3 percent were considered higros. In about a month, there will be a new list of higros.
“These firms are in every single industry within the state,” says Kunkle, president of North Carolina consulting company Outlier LLC. “They’re almost randomly geographically distributed.”
Focusing on nurturing these businesses and helping them expand represents a new approach to economic development, His research shows that 97 percent of new jobs come from businesses expanding, rather than companies opening or relocating. The most successful businesses hire new workers gradually as they grow.
“It’s better to hire 10 people 10 times than to hire 100 people once,” Kunkle says.
The Allegheny Conference on Community Development plans to put this research to work to predict which businesses in a 10-county region of southwestern Pennsylvania are most likely to succeed, and how to best ensure their success. Details are still being worked out.
Also, the Team Pennsylvania Foundation is talking with the state Department of Community and Economic Development about how to use Kunkle’s findings.
Sources: Dr. Gary Kunkle, Outlier LLC; Matt Zieger, Team Pennsylvania Foundation
Writer: Rebecca VanderMeulen