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