RESEARCH TRIANGLE PARK – A new working paper from the Kauffman Foundation finds that newly launched startups continue to create new jobs even in times of recession.
The study looks at data from employer startups less than one year old and employer firms one year and older, as well as younger employer firms compared to older employer firms. The bottom line: During the prior four recessionary periods in the United States, startup job creation appeared uncorrelated with these economic downturns.
“Startup net job growth is not impacted during economic downturns or recessions because new firms haven’t yet shed or destroyed jobs,” said Thom Ruhe, president and CEO of NC IDEA, commenting on the study in an interview with WRAL TechWire. “Typically all they do in their first year of existence is hire folks; namely create jobs.”