Most start-up firms fail to grow economy

April 16, 1999

Less than 10 per cent of business start-ups go on to make much of a contribution to national economic growth, job creation or even provide significant returns to their owners, according to a study by Amar Bhide of the Harvard Business School. Professor Bhide's study, presented at a Cambridge University conference on enterprise last week, found that the majority of new firms can be described as marginal, providing routine services in mature fields such as "lawn care and beauty salons". The study, Origins and Evolution of New Businesses, refers to non-marginal businesses, such as biotechnology companies, which have a chance of securing significant returns.

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