New firms create two-thirds of new U.S. jobs
We’ve written recently about St. Louis’ lack of small-business job growth, and today a new Kauffman Foundation study reminds us why this issue is so important. Analyzing U.S. Census data for 2007, Kauffman says that two-thirds of all net job creation happened at companies less than five years old.
Plenty of other research has emphasized the importance of small business for job creation, but this study says it’s age, not size, that matters. Authors Dane Stangler and Robert Litan say young firms may even acount for some of the job creation at bigger, older companies. That’s because many fast-growing firms get acquired, and then their job creation gets counted as part of the parent.
In Kauffman’s news release, Litan puts the research in the context of an economy that’s struggling to recover from a recession and a credit crunch:
This study sends an important message to policymakers that young firms need extra support in the early years of formation so they can grow into viable job creators. Sometimes a single barrier, such as limited access to credit for business growth, can mean the difference between survival and failure. We must create an environment that aids firm formation and growth if we are going to turn employment around.
Given that St. Louis fared poorly in firm formation even before the recession, our local leaders should pay a lot of attention to this message.
(6 votes, average: 3.67 out of 5)
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
St. Louis is a VERY closed business culture. A handful control the entire business environment and that handful is getting smaller all the time. You have to be a member of a certain tribe if you want to succeed in St. Louis and most American cities these days. America’s best days are behind it now because the Local, State, and Federal Governments have been bought and paid for and have failed the people. The governments are so completely out of touch that they think they can count on these few businesses to keep them in power and to make up for lost revenue they can pass it on to taxpayers. The pool of people that can buy from businesses and pay taxes gets smaller by the day. Soon we will be in Civil War and none of it will matter as the Carpet Baggers descend on us to pluck the remaining bit of wealth from the country before abandoning it to the Communist Chinese to plunder our resources. The American Experiment failed because the petri dish was polluted with increasing amounts of parasites until it killed the host.
St. Louis business is spot-on. And I would add that unless you are in a certain fraternal order, you must a minority to have much of a chance.
no worry, there is nothing new coming to STL. Why would a new or existing business come?
High crime, no airport schedule, poor tax rate, nothing to attract business, poor business climate, and of course THE PAROCHIAL KINGS running the area.
Wow, great stuff from the gloom and doom patrol. I disagree with all the comments above, and know plenty of entrepreneurs who have done quite well here in St. Louis.
I am sure you do BRIAN, but facts are facts,and more business has move out of St. Louis than has come to St. Louis. The Airport is all but gone as a major corporate draw factor, crime is in the top 5 in the country and unemployment is about 10% depending on the day of the week. Schools are over built in the city and county and test scores are dropping. And you facts are?
Greyshark, St. Louis business - what do you do? Are you business owners? Bitter, failed entrepreneurs? Certainly you make no bones about blaming others for your implied lack of success. Maybe you should take a long walk in the hall of mirrors. I’m moving to STL next year and can’t wait to exploit the opportunities STL has to offer people who are prepared to get off their rears.
Greyshark, St. Louis business - what do you do? Are you business owners? Bitter, failed entrepreneurs? Certainly you make no bones about blaming others for your implied lack of success. Maybe you should take a long walk in the hall of mirrors. I’m moving to STL next year and can’t wait to exploit the opportunities STL has to offer people who are prepared to get off their rears.
— Aussie
7:34 pm November 5th, 2009
You gonna do a walkabout? Maybe sell us some knifes or kitchen appliances with an overly excited, strained, Aussie accent?
It is tough for any small business to be successful, but the obstacles they have to face in St. Louis make even harder no matter how great a business plan they have. If they are looking to construct a building they better use Union or minority workers, regardless of the high cost and poor craftsmanship or else they will be picketed and called racist. The same thing applies for their work force, they better have so many minorities and they all better be members of a union or else there will be trouble and bad press. Unfortunately this city has been ran by a small close group of people with poor city planning and everyone has to pay for it.
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