Industries with private equity activity grow more rapidly (as measured by total production, value added and employment) and experience no more volatility in the face of industry cycles than other industries.
In some cases, industries with private equity activity are less volatile, particularly in terms of employment.

This is according to a new World Economic Forum study, Globalization of Alternative Investments Working Papers Volume 3: The Global Economic Impact of Private Equity Report 2010, which is part of an exhaustive examination of the private equity industry’s impact on the global economy.

The working papers also find that modest levels of direct and indirect government venture capital support (in conjunction with private funding) can help the performance of young enterprises. Public support seems most effective when provided at a national or international organization level.

The research project included an international team of noted academics led by Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School.