Understanding Business Dynamics: An Integrated Data System for America's Future

by National Research Council, Division of Behavioral and Social Sciences and Education, Committee on National Statistics, Panel on Measuring Business Formation, Dynamics, and Performance, Christopher Mackie (Editor)

Overview

The U.S. economy is highly dynamic: businesses open and close, workers switch jobs and start new enterprises, and innovative technologies redefine the workplace and enhance productivity. With globalization markets have also become more interconnected. Measuring business activity in this rapidly evolving environment increasingly requires tracking complex interactions among firms, establishments, employers, and employees. Understanding Business Dynamics presents strategies for improving the accuracy, timeliness, coverage, and integration of data that are used in constructing aggregate economic statistics, as well as in microlevel analyses of topics ranging from job creation and destruction and firm entry and exit to innovation and productivity. This book offers recommendations that could be enacted by federal statistical agencies to modernize the measurement of business dynamics, particularly the production of information on small and young firms that can have a disproportionately large impact in rapidly expanding economic sectors. It also outlines the need for effective coordination of existing survey and administrative data sources, which is essential to improving the depth and coverage of business data.

Product Details

ISBN-13:	9780309104920
Publisher:	National Academies Press
Publication date:	05/05/2007
Pages:	200
Product dimensions:	6.00(w) x 9.00(h) x 0.70(d)

Table of Contents

Executive Summary     1
Introduction and Motivation     1
The Current System     13
Study Scope     15
Business Data Uses and Challenges     17
The Value of Studying Business Dynamics     19
Applications That Would Be Advanced by Further Development of Data on Young and Small Businesses     21
The Panel's Work     23
What Is a Business?     28
Defining Business Units and Identifying Births and Deaths     29
Defining Business Units for the Purpose of Measuring Dynamics     35
Concept Versus Existing Data Collection     42
Conclusions     45
The Ideal Business Data System     47
Guiding Design Principles     47
Defining and Tracking Businesses Over Time-The Business Register     53
Ideal Data Collection Characteristics     57
Limitations of the Current Data System for Measuring Business Dynamics     65
Data Coverage of Young and Small Businesses     67
Gaps in Data on Business Dynamics and on Small, Young, and Nascent Firms     17
Systemic Deficiencies     79
Appendix: Data-Sharing History     87
Improving Data and Statistics on Business Dynamics-Bridging the Gap Between the Currentand a Comprehensive System     92
Expanding Data Sources for Measuring Business Dynamics     94
More Effective Use of Existing Information     100
Changing the Data-Sharing Environment to Realize Systemic Efficiency     110
Recommendation Priorities and Costs     113
References     117
Appendixes
Overview of Current Data Collections     123
Counting Firms and Cataloging Essential Characteristics-The Business Lists     124
Tracking Businesses over Time: Business List-Based Sources of Longitudinal Microdata     130
Data Sources Designed to Improve Coverage of Small and Young Businesses     136
Employment Statistics     139
Data on the Self-Employed, Entrepreneurs, and Business Gestation     142
Data Coverage of Special Sectors: Agriculture, Nonprofits, and E-Commerce     148
Financial Data     152
References     154
Table A-1 Business Data Sets     158
Biographical Sketches of Panel Members and Staff     172
Index     179