Business startups that survive grow faster than more-established
companies, according to Business Dynamics
Statistics data funded by the Ewing Marion Kauffman
Foundation. However, because entrepreneurial ventures also have higher
mortality rates than older companies, they also have higher rates of
job loss reflecting an “up or out” pattern.
High Growth and Failure of Young Firms
highlights a single dimension of the U.S. Census Bureau’s Business
Dynamics Statistics (BDS). The BDS provides researchers with
comprehensive data, broken out by firm age, that are necessary to
understanding startup firms’ role in job creation.
The High Growth and Failure data show that very young
firms (one year old) have a net employment growth rate of about 15
percent, if they survive, but about 20 percent of jobs at startups are
lost due to business establishment closings in the first year. Older
firms (age 29 and older), on the other hand, create jobs at a rate of
about 4 percent, conditional on survival, and have a similar rate of
job loss due to business establishment closings. Among surviving firms,
average employment growth rates decline with the age of the firm.