Power Breakfast: Young firms create the jobs, Ga. bank failure, health care, NBC-Comcast

Small business long has been held out as the biggest job creator in the American economy, writes AJC reporter David Markiewicz.

But a new study says that a company’s age — not its size — is the most important factor in creating jobs.

The report, which used U.S. Census data, says it’s actually young firms — those 1 to 5 years old — that add the most jobs. Some, but not all of those young firms, are still considered small businesses.

Commissioned by the private, non-partisan Kauffman Foundation, the study says 8 million of the 12 million jobs added in 2007 were created by young firms.

The study’s authors said the distinction between small businesses and new ones has public policy implications, Markiewicz writes. They argue for: cutting payroll taxes; helping immigrants seeking scientific training or trying to launch companies; helping academic entrepreneurs commercialize their innovations; and aiding the ability of firms to borrow.

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November 9th, 2009
8:02 am

Isn’t 5 years considered the critical point for small business?If it lasts that long it’s probably a stable business. How many of these 1-5 year old businesses that add the most jobs will actually survive?That studty would be of interest.