Where is the economic growth that will eventually get us healthy again going to come from? The McKinsey consulting firm has analyzed where the growth has been coming from for the past few decades, and one area stands out: No, it's not small business, but multinational firms. McKinsey found that since 2000, multinational companies have contributed 74 percent of the growth in our GDP.
Interestingly enough, though, multinationals have not contributed nearly as much to jobs growth. From 1990-2007, according to McKinsey, multinationals contributed only 11 percent of our total employment growth, with other U.S. firms accounting for the remaining 89 percent. Apparently, the larger firms are much more efficient: Despite hiring merely 11 percent of all workers, they accounted for 41 percent of the growth in labor productivity.
If those trends continue, we'll have two dynamics working at odds to each other. If we want to see economic growth, we should look toward multinationals, but if we want to see unemployment brought down, it's more likely to happen with U.S.-only firms.
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