Whether the economy is in the pits or on cloud nine, startups are the reason behind any net job growth, a new study from the Ewing Marion Kauffman Foundation reports.
The study analyzes the U.S. Census Bureau's Business Dynamics Statistics, which tracked new business development between 1977 and 2005. The bureau defined startups as firms less than a year old.
Although it takes a startup only 12 months on average to start shedding employees, the 3 million jobs startups create each year help the economy yield net job growth despite the nearly 1 million existing companies lose each year. Existing firms add new jobs to the economy, but that number dwindles from about 750,000 in year one to about 250,000 by year 15, the foundation reported.
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