Kauffman Report: Startup Firms are Key to Net Job Growth in US

In a report just out, the Ewing Marion Kauffman Foundation announced that economic data shows net job growth in the US during most years is driven by startup firms.  While existing companies of all sizes constantly create and eliminate jobs, only 25% of the time during the last 28 years was the annual net job gain in existing companies positive.

The study, titled "The Importance of Startups in Job Creation and Job Destruction", finds that both on average and for all but seven years between 1977 and 2005, existing firms reduced net jobs.  New firms in their first year added a combined average of 3 million jobs per year during this timeframe.  Further, the study shows that during recessionary years, job creation at startups continues, and net jobs at existing firms are highly sensitive to negative business cycles.

For more on this study, download the report