Young companies and entrepreneurs are the engines of job creation
This report issued by the Kauffman Foundation (USA) in November 2009 examines net new job creation in the USA in terms of firm age rather than firm size. From 1980-2005, nearly all net job creation in the United States occurred in firms less than five years old. This data set also shows that without startups, net job creation for the American economy would be negative in all but a handful of years. If one excludes startups, an analysis of the 2007 Census data shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation, averaging nearly four new jobs per firm per year. Of the overall 12 million new jobs added in 2007, young firms were responsible for the creation of nearly 8 million of those jobs. It is clear that new and young companies and the entrepreneurs that create them are the engines of job creation and eventual economic recovery. The distinction of firm age, not necessarily size, as the driver of job creation has many implications, particularly for policymakers who are focusing on small business as the answer to a dire employment situation.
For the full report, see http://www.kauffman.org/uploadedFiles/where_will_the_jobs_come_from.pdf
Print