The Kauffman blog Growthology has been running a series of very interesting posts on job creation by young firms. Basically, the idea is that young firms–less than five years old–are the most important source of net new jobs in the economy. The empirical basis is provided by a November 2009 Kauffman paper titled “Where Will the Jobs Come From?” Here is the most compelling chart in the paper:
As the owner of a new business, I find this chart very interesting. It includes everything from technological startups to new restaurants to cleaning firms. But what they all have in common is that a lot of jobs are created by “founder optimism”–the willingness of someone to have faith and put resources into a business w/o guarantees.
I’m going to write more about this.