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Kauffman Foundation: The Importance of Startups in Job Creation and Job Destruction

Startup companies are almost exclusively responsible for net job creation, the Kauffman Foundation finds.

The Kauffman Foundation finds that startup companies are a critical part of the employment puzzle. According to a new dataset from the federal government called Business Dynamics Statistics (BDS), startups continuously create new jobs, while old companies are eliminating the most jobs.

Without startups, there would be no net job growth in the economy. Figures supporting this claim going back to 1977, and have only not proven true for seven of those 33 years.

As a group, startup firms add approximate 3 million jobs per year in the first year of existence. While existing companies do, of course, create jobs, existing businesses tend to lose more jobs than they create.

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