September 20, 2017

Census Bureau: Startup Firms Created Over 2 Million Jobs in 2015

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  4. Census Bureau: Startup Firms Created Over 2 Million Jobs in 2015

In 2015, the nation’s 414,000 startup firms created 2.5 million new jobs according to data from the Census Bureau’s Business Dynamics Statistics. In contrast, this level of startup activity is well below the pre-Great Recession average of 524,000 startup firms and 3.3 million new jobs per year for the period 2002-2006.

Other highlights include:

  • Job creation in the United States totaled 16.8 million with job destruction equaling 13.7 million. Job creation minus job destruction equaled net job creation of 3.1 million in 2015.
  • Young firms (those less than 6 years old) accounted for 11 percent of employment and 27 percent of job creation.
  • Old firms (those more than 25 years old) comprised 62 percent of employment and 48 percent of job creation.
  • The job creation rate for young firms, excluding startups, was 20 percent in 2015. This rate is above the Great Recession low of 15 percent in 2009, and it has recovered to its average level of 20 percent during the period 2002-2006.
  • The net job creation rate for establishments in metro areas was 2.7 percent. For establishments in nonmetro areas, the rate was lower at 1.2 percent.
  • States with the highest net job creation rates in 2015 — 3.4 percent and above — are in the South Atlantic, Pacific and Mountain divisions. There were significant differences in net job creation rates at the state level, ranging from about 5 percent to just below 0 percent.
The Business Dynamics Statistics are based on Business Register data, which covers all employers in the U.S. private nonfarm economy. The Business Register is based on administrative data combined with data from the Report of Organization (formerly known as the Company Organization Survey).
This year’s release is limited to 13 tables with statistics tabulated for the following categories:

Firm Characteristics

  • Economy wide
  • State
  • Sector
  • Firm age
  • Firm size
  • Firm initial size
  • Metro/nonmetro

Establishment Characteristics

  • Economy wide
  • State
  • Sector
  • Establishment age
  • Establishment size
  • Establishment initial size
This temporary reduction in the number of tables will allow the completion of work to modernize the methodology that generates the Business Dynamics Statistics. The next release, planned for 2018, will provide an expanded set of tables that incorporate long-planned enhancements, including switching from the Standard Industrial Classification system to the North American Industry Classification System.
Note: A firm is a business organization consisting of one or more establishments under common ownership or control. An establishment is a single physical location where business is conducted or where services or industrial operations are performed. The firm and establishment are the same for single-establishment firms. Startup firms are new firms of age zero.

All figures are rounded.

For the definitions of job creation and destruction, see <www.census.gov/ces/dataproducts/bds/definitions.html>.

For the definition of job creation and net job creation rate, see Concepts and Methodology at <www.census.gov/ces/dataproducts/bds/methodology.html>.

For information on census divisions, see <www.census.gov/geo/reference/gtc/gtc_census_divreg.html>.

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This post was originally published here.
Data & Trends