Census Data Analysis Shows New and Young Firms Drive Job Creation
Today, the Ewing Marion Kauffman Foundation released the study Where will the Jobs come from?
which shows that companies less than five years old created nearly two-thirds of net new jobs in 2007. These firms create more net new jobs than their older counterparts, as well as a higher average number of jobs per firm. Furthermore, there is a substantial set of rapidly growing businesses within this group of companies.
This analysis of U.S. Census Bureau data could not be timelier. The Bureau of Labor Statistics update on U.S. employment is due out on Nov. 6. While we might see some improvement, numbers will likely still show a dismal picture for American workers.
“This study sends an important message to policymakers that young firms need extra support in the early years of formation so they can grow into viable job creators,” said Robert Litan, vice president of Research and Policy at the Kauffman Foundation and one of the study’s authors. “Sometimes a single barrier, such as limited access to credit for business growth, can mean the difference between survival and failure. We must create an environment that aids firm formation and growth if we are going to turn employment around.”