An article in The Economist points out that the discussion of job creation might be missing an important ingredient if we are only considering small businesses and large corporations.
The interest in companies of this size is because they seem to have performed better in the difficult recent period in terms of job creation.
This intermediate class of companies is compared to Germany’s Mittelstand businesses.
One interesting characteristic of these companies is that they are mostly privately owned.
Benefits from private ownership are suggested.
The fact that these midsized firms continued to add jobs across the recession suggests that they had a business posture that kept product output and the number of employees growing.
An article from Forbes provides some additional insight into private versus public companies.
This suggests that private companies are more recession-proof than public companies, and public companies respond to recessions by laying-off workers and cutting spending. It would seem that private companies respond to recessions by trying to maintain their business plans, while public companies respond by trying to maintain their profit levels. Or in simpler terms: private companies try to do something helpful, while public companies try to do something harmful.
These midsized companies and their private nature deserve further consideration. It seems that many public corporations are going private if the possibility presents itself—presumably because they recognize advantages to being private. Is it possible that public corporations have evolved to a state where their focus on short-term profitability and stock price has rendered them economically deficient? In other words, are they becoming obsolete? Should they become obsolete?