Do small businesses actually innovate? A new study suggests very few startup businesses are dynamic.

How to start and grow companies.
Sept. 19 2011 7:15 AM

Why Small Businesses Aren't Innovative

Everyone says small businesses are dynamic, market-shaking, job creators. But new evidence suggests that's not true.

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One thing is not in dispute: Young companies—which tend to be small—create the bulk of new jobs. Of late, they have been starting with smaller staffs and adding fewer employees, which helps explain the current economic malaise. Washington is desperate to support small businesses and to help them add jobs, to help the overall economic picture. But first Washington should take the time to understand which small businesses really do innovate and grow. 

Annie Lowrey is a contributing editor for New York magazine. She can be reached at annie.lowrey@gmail.com.

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