Start-Ups Create Lasting Jobs

A recent report from the Ewing Marion Kauffman Foundation entitled After Inception – How Enduring is Job Creation by Start-ups?”, uncovered several notable findings about the job creation power of start-ups:

  1. The number of start-ups that flourish and create jobs balances the jobs lost by companies that close.
  2. 80% of the jobs created in the first year are still here after 5 years.
  3. Companies that start during recessions general catch up in hiring after the recession ends.

So what?

First of all, it means that start-up jobs do not disappear overnight and that small business remains a durable engine of job growth. The start-ups that do survive create sustainable jobs that make up for most of the jobs lost by failed start-ups.

Secondly, a recession does not impose lasting consequences on businesses started during a recession. While there is a temporary slowdown, by year 5 they reach a level roughly equal to businesses started when there wasn’t a recession … although it’s getting a little harder each day to remember when that was.

So, the job creation engine of small business is critical to expanding our economy and putting people back to work. Too bad the Beltway Boys don’t know how to do about it!

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