Last November, The Kauffman Foundation issued a great report entitled “Where Will the Jobs Come From.”  In a novel approach to reviewing job creation data, the researchers (Dane Stangler and Robert Litan) examined the data looking for firm age, rather than size, and emphasized job creation rather than current employment.  In their words: “Let’s not ask where people work, but where each additional increment in net job creation occurs” (pg 4).  They’re using Census Bureau data, so of course, there is some latency in the information.  The study’s research data focused on 2007.  Several interesting points worth noting:

“…without startups, net job creation for the American economy would be negative in all but a handful of years.”  (pg 5)

Given that roughly half of start-up companies fail, the authors posit that some number of those gains are included in subsequent years’ losses.  But they’re more interested in the 50% of start-up companies that survive from year 1 to year 5:

“[in 2007] young companies, those aged one to five, had been the most dynamic in adding new jobs to the economy.  OF the entire pool of new jobs added in 2007, about two-thirds was generated by these young companies.” (pg 6).

So what?  The authors put their most important point in large-font, bold type, so I will too:

ENTREPRENEURS = RECOVERY

The NY Times has a great thread on their “Room for Debate” blog about the rising costs of college vs. the maximum amount of Pell Grant money available…grants that a large number of students use to make college attendance possible.

The disparity is striking:

Take a look at a better chart with more of the source material here.

The writers on “Room for Debate” differ (of course) in their take on whether or not more federal assistance is needed.  Richard Vedder, a professor and economist from Ohio University, posits that federal loans and grants are part of the reason why costs have risen…  His argument is interesting: As more grants and loans are available, colleges have raised tuition to capture more of the loan and grant funds in a reinforcing upward spiral.  His solution: focus on improving secondary education to enhance the number of students who are actually college-ready upon graduation from highschool…

Whatever the strategies for addressing this problem might be, the fact remains that if the US economy is going to return to health and remain the dominant force in the global marketplace, a wide swath of our workers will need higher education to be able to compete and drive innovation.  With costs spiraling ever higher, it remains to be seen whether or not we can collectively find a way to overcome these barriers and develop the knowledge-based economy that will be increasingly critical in the future.