(KANSAS CITY, Mo.), August 2, 2010 – Startup companies, the nation's most promising source of new jobs, are critical to reducing the current 9.5 percent unemployment rate. Not only are startups responsible for net new job growth in the U.S. economy, but recent research from the Ewing Marion Kauffman Foundation shows that the majority of the employment they generate remains as new firms age, creating a lasting impact on the economy.
Conventional thinking on employment from startups is that many of the jobs they create evaporate as a high percentage of them fail only a few years later. The new study, "After Inception: How Enduring is Job Creation by Startups?" found, instead, that, while many new firms fail, destroying jobs, others also thrive and create jobs. This growth in employment partially balances out the jobs lost by closing and shrinking firms.
The jobs created when startups are established do not disappear overnight. In fact, they are remarkably durable. When a given group of startups reaches age five, the group's employment level is 80 percent of what it was when it began. In 2000, for example, startups created 3,099,639 jobs. By 2005, the surviving firms (half of those that had started) had total employment of 2,412,410, or about 78 percent of the jobs that existed when these firms were born.
To read the full, original article click on this link: Jobs Created by Startup Companies Have Long-Lasting Economic Impact