On February 1, 2012, ITIF Senior Analyst participated in a roundtable organized by the U.S. Senate Committee on Small Business and Entrepreneurship on Developing and Strengthening High-Growth Entrepreneurship. The roundtable took up a crucial subject to revitalizing the U.S. economy as evidence clearly shows that it is young, high-growth firms that are responsible for the lion’s share of employment growth.
In fact, new and young firms have been the primary source of new jobs in the United States over the past three decades. Analysis of U.S. Census Bureau data has shown that companies less than five years old created nearly two-thirds of net new jobs in 2007. And an OECD study found that from 1992-2005, business start-ups accounted for 140 percent of the net growth in employment in the United States. This is true for U.S. states as well. For example, Pennsylvania found that a mere .3 percent of firms (less than one-third of one percent) created 74 percent of all the net new jobs created over a ten year period of time.
There are a number of policies the U.S. Senate’s Committee on Small Business and Entrepreneurship should consider enacting or promoting that are positioned to support the growth of entrepreneurship and small business.