Smaller employers do generate plenty of jobs, but they also destroy them in great quantities. If you add together creation and destruction, no clear picture emerges. But the myth of small business fecundity was developed from bad interpretations of bad data. Here are some of the more egregious errors. If a firm with 600 employees has a bad year and shrinks to 400, this will show up in bad studies as a growth of 400 jobs in the small business sector, not a loss of 200 jobs from the bigger .
Many counts ignore job death, and just focus on new hires.
The database many analysts use, from Dun and Bradstreet, while useful for many commercial purposes, is worse than useless for employment analysis. Birch's assertion was picked up by apostles of entrepreneurship like George Gilder and the high-tech worshippers once known as the Atari Democrats. Myths about firm age travel in partnership with ones about size. And smaller units offer jobs with shorter lifespans than larger ones. Older, larger plants, then, offer more job security than young, small ones.