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Study: Mass. Firms Shrinking, Costing The State Jobs

By Galen Moore, Boston Business Journal

BOSTON (CBS) – Massachusetts is creating fewer businesses, and those businesses that are being created here are dramatically shrinking in size, according to a study, titled “The Big Shrink,” published by the Pioneer Institute, a Boston-based public policy think tank.

Massachusetts is among a handful of states that saw no new net job growth from 1990 through 2007, the report stated – before the great recession hit, a period in which the rest of the country experienced significant job growth.

Moreover, from 2003 to 2007, while the rest of the country saw a 26.6 percent job gain, Massachusetts lost 0.3 percent of its jobs.

The researchers laid responsibility for that counter-trend on the shrinking size of Mass. firms, noting the average company size is down in all industries except manufacturing during the 17-year period.

Lisa van der Pool of the Boston Business Journal reports

In 1990, the average firm in Massachusetts employed 16 people.

As of 2007, the average company here had just 9.7 workers, a 39-percent reduction Pioneer researchers called “staggering.”

The number of firms was growing – but a “significant portion” of new firms were in the single/non-employer category, the study reported, tracking 174-percent growth in that category.

Meanwhile, the number of large firms (companies with more than 100 employees) has remained stagnant, retreating to 1990 levels by 2007.

Download the full report at the Pioneer Institute’s web site.


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