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The past few months have brought a new series of reports dissecting the job creation phenomenon by new firms, timely at a time when so much of the economic discussion lately in the U.S. has focused on strategies to recover the roughly 8 million jobs lost during this past recession. We already knew that research has firmly established that new firms—those no more than five years old—over the past three decades have been responsible for virtually all of the net new jobs created in the U.S. economy (see 2009 reports “Jobs Created from Business Startups in the United States,” and “Where Will The Jobs Come From?”). As the nation debates this leading up to the mid-term elections in the United States, let’s further examine U.S. job growth and its relationship to startup companies.

In March, a new study by the Kauffman Foundation’s Dane Stangler, “High-Growth Firms and the Future of the American Economy,” zoomed in on new firms that scale using data from the Census Bureau. The study demonstrated that not only are new firms generally important to the vitality of the economy and job growth, but new firms that grow in revenues and jobs are especially important. More precisely, the top 1 percent of all companies generate 40 percent of new jobs, and the vast majority of these firms are no more than five years old. If we further zoom in on the most rapidly growing young firms (those between ages 3-5 years), they represent less than 1 percent of all companies in the economy, but account for 10 percent of new jobs created each year.

To read the full, original article click on this link: Message to Our Next Leaders Its All About the Startups - Entrepreneurship.org

Author: Jonathan Ortmans is president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues. In this capacity, he leads the Policy Dialogue on Entrepreneurship, focused on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as a senior fellow at the Kauffman Foundation.