The Only Startups That Matter to Job Creation

Some of the most dynamic cities for high-tech company formation include Missoula, Montana, and Cheyenne, Wyoming.

You hear it all the time: Small business is the engine of U.S. job creation, so they need tender loving care, like special tax breaks and other goodies. This narrative is wrong. Census Bureau data show that small businesses destroy almost as many jobs as they create.

Now comes the Kauffman Foundation with an insightful report showing that not all small businesses are equal-opportunity job destroyers. High-tech startups are different. Unlike small businesses overall, they create net new jobs.

The actual numbers are stark: In 2011, the last year with data available, high-tech companies between one and five years of age created a net 16,700 jobs. Other businesses between one and five years in the private sector overall lost 513,700 jobs.

What’s more, the foundation concludes, technology startups aren’t located just in the usual places around Silicon Valley, Austin, Texas, and Boston. Some of the most dynamic cities for high-tech company formation include Missoula, Montana, and Cheyenne, Wyoming.

By Paula Dwyer

Full Story: http://www.bloomberg.com/news/2013-08-16/the-only-startups-that-matter-to-job-creation.html

Many thanks to Mike Ferrucci at Parsec for sharing this.