They are also linked with productivity growth, because new companies are often innovators or take advantage of innovations to exploit niches and develop new products. New companies tend to be more productive than firms that have gone out of business and can also pressure existing companies to be more productive.
As such, they  BIS central bankers’ speeches  3  contribute to the growth in productivity that is ultimately key to improving our standard of living. Recessions are painful and require adjustments. Companies, and sometimes entire industries, shut down, often never to return. But after the destruction, new ones are born that help drive the next wave of growth.