Targeting Firm Births and Economic Regeneration in a Lagging Region

This paper provides a critical evaluation of the practice of targeting the firm birth rate as part of a regional regeneration policy. It raises some fundamental questions about the appropriateness of such a practice and shows that different specifications of the birth rate generate very different implications for policy intervention, as measured by the number of births required. It also demonstrates that even when the specification is agreed, the translation of the target into actual numbers of births is far from straightforward, especially where the target aspires to match a region’s performance with what is going on elsewhere and where the survival rate of businesses is also being targeted in parallel. The North East of England is used as the particular context for the evaluation, although the discussion has much wider applicability.