Abstract
The rise in unemployment is an important and urgent task to be tackled for the growth of economy in Korea. Although prior studies have revealed some factors leading to the creation of employment, studies simultaneously considering various factors, such as small and medium enterprises’ (SMEs’) basic factors, technology innovation activities, innovation capabilities, and the government policies, have been limited. This study seeks to design an integrated model that focuses on both SME and government policy factors associated with the creation of new employment. For this, we use the Korea Innovation Survey (KIS) data on 2828 firms in the manufacturing industry in Korea for 2013–2015. Using the multivariate regression model, we identified the association of SME and the government policy factors on the creation of employment. We show that sales, product innovation, organization innovation, and the support program by the government contributed to the job creation, whereas a firm’s age had a negative correlation with the creation of employment. The statistical results and discussion of our findings facilitate a better understanding of the association between various SMEs’ factors and the creation of employment, and therefore, should help in designing better policies and strategies for employment growth.
Highlights
The creation of jobs is one of the most important socioeconomic issues in the world
The results indicated that the following factors were positively associated with new employment: (1) sales (p-value: 0.000); (2) product innovation (p-value: 0.031); (3) organizational innovation (p-value: 0.017); and (4) support programs (p-value: 0.016)
As the creation of employment has been recognized an important and urgent task for the Korean government, understanding factors associated with job creation is essential for designing evidence-based policies and programs
Summary
The creation of higher quality jobs has emerged as a key agenda in many countries, as the global economy witnesses a recessionary phase after the global economic crisis in 2008 (Organization for Economic Cooperation and Development (OECD 2011)). It is noted that even if the economy recovers, it would be hard to cope with the demand for employment, owing to the structural weakness of the employment market (ILO 2014). To avoid such an adverse situation, many countries have implemented policies and one of the key policies is encouraging job creation. In the case of the United States, resolving the ongoing recession and the high unemployment rate were at the top of the economy policy agenda
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