The Importance of Young Firms for Economic Growth

firm age vs firm size 

The latest Entrepreneurship Policy Digest from the Kauffman Foundation revisits the debate of the age of a business vs. its size when it comes to job-creating power. 

According to the digest released last week, new businesses account for nearly all net new job creation and almost 20 percent of gross job creation.

While existing small and large businesses are important to overall economic strength, neither group contributes to new job creation the way new firms do.

The Importance of Young Firms for Economic Growth explains that startup activity is on the decline in the United States, and proposes strategies for policymakers -- at the federal, state and local levels -- to help reverse that trend. 

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