State's High-Impact Firms Create Jobs, Growth

"High-impact" firms create Arkansas' new jobs and growth, according to a study recently released by the Office of Advocacy of the U.S. Small Business Administration.

Distributed across all industries, high-impact firms account for almost all employment and revenue growth in the national economy, the study concludes.

Of the 376,604 high-impact firms identified by researchers nationwide, 3,077 are located in Arkansas. That number represents 2.18 percent of the state's firms.

The study, "High-Impact Firms: Gazelles Revisited," defines high-impact firms as those whose sales have at least doubled over a four-year period and which have an employment "growth quantifier" (the firm's absolute change in employment multiplied by the percent change) of two or more.

The study notes that such firms are found across all industries and in all geographic regions. It ranks regions, states, metropolitan statistical areas and counties by their percentage of high-impact firms. The study finds, with some data limitations, that high-impact firms are not startups but are on average around 25 years old, and that they come in all size classes. The report also documents that over the periods studied, nearly all job losses came from large, low-impact firms.

"High-impact firms are important to Arkansas' economic growth and development," said Chad Moutray, chief economist for the Office of Advocacy. "State policy makers would be wise to consider how their policies can encourage such firms."