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IT-Intensive Firms Likely to Create More Jobs, Report Finds

Discovering the ideal conditions for entrepreneurs to succeed is a topic widely researched in today’s economy. Most researchers will agree that having access to capital, a culture conducive for risk, and skilled workers are key components. A new report from the Technology CEO Council (TCC) adds that powerful and affordable new technologies, and companies that harness them, are at a greater advantage than ever before when it comes to driving job creation.

The report points to new research from Catherine L. Mann of Brandeis University indicating companies that were intensive users of IT grew jobs at a rate of 5.1 percent from 2001-09, while overall employment shrank by 0.5 percent. And, although small IT-intensive service firms represent only 5 to 6 percent of all employment, they averaged 34 percent of new jobs created between 2002 and 2008. The next gazelles, or high-growth enterprises, will be those businesses best able to use technology to pioneer new management techniques, capitalize on new production methods, exploit distribution channels and maximize organizational structures, according to the authors.

A combination of breakthrough innovations over the past several years has enabled more startups to succeed. The report points to on-demand supercomputing, low-cost, high-capacity data storage and ubiquitous, robust connectivity as three transformational breakthroughs. Technology also has played a role in how startups find financing with a wave of new Internet platforms that offer crowd funding.

In addition to being good at technology, the report indicates that having access to talented people, markets, and capital are the factors that best enable high-growth companies to succeed. Several policy recommendations are outlined in support of these factors. However, the take-away from the authors is that technology will prove even more essential to business success and survival in the future and those not taking advantage of new technologies will be left behind.

The report, High Impact: How IT is Empowering the Next Generation of Entrepreneurs, is available at:[1].pdf.

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