What does this indicator measure?

This indicator measures the 2007 business churn (establishment births and deaths as a percentage of total establishments), employment turnover from business churn, and the ratio of establishment births to deaths in the Syracuse, Albany, Buffalo, and Rochester Metropolitan Statistical Areas (MSA’s).

The metrics presented below capture some harder to define, more dynamic elements of the regional economy, such as the rate at which resources are redeployed and how rigid or fluid the economy might be. The measure of firm births and deaths is the most influential factor affecting employment growth and is also correlated with output growth, per capita income growth, and productivity, and therefore highly correlated with economic growth in general.  Note that firm contractions and expansions are weighted equally “positive” in the first metric below and should be considered together with the ratio of births and deaths to get one dimension of overall business expansion or contraction.–explanation courtesy of the Brookings Institute