Innovation America Innovation America Accelerating the growth of the GLOBAL entrepreneurial innovation economy
Founded by Rich Bendis

Startups during recessionsDo people start businesses more frequently as a result of recessions? You might think so, but a new study just released by the Ewing Marion Kauffman Foundation suggests otherwise.

The study Exploring Firm Formation: Why Is the Number of New Firms Constant? shows that the level of new firm formation has remained virtually consistent from year to year for more than 30 years.

Authors Dane Stangler and Paul Kedrosky of the Kauffman Foundation researched several types of data on company formation, beginning in 1977. These included employer firms as tracked by the U.S. Census Bureau and the Small Business Administration, firm startups tabulated by the Census Bureau, and new establishments (including existing firms adding locations) as tracked by the Census Bureau and the Bureau of Labor Statistics. No matter which type of data the authors studied, they found that the number of new companies launched each year varied by just 3 to 6 percent. In fact, the number of startups stayed fairly consistent even from quarter to quarter within a given year.

To read the full, original article click on this link: Do Recessions Lead to More Startups? | Small Business Trends

Author: Anita Campbell