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State economic development programs, which traditionally target high-tech firms, may be missing 75 percent of high-growth companies
Source: Ewing Marion Kauffman Foundation
Certain regions of the country continuously produce innovative, high-growth companies that have transcended the economic downturn of the last few years. Surprisingly, those regions include more than the expected locales like Boston and Silicon Valley.
"The Ascent of America’s High-Growth Companies," a report series released today by the Ewing Marion Kauffman Foundation, reveals that high numbers of fast-growing firms are concentrated in unexpected regions and industrial sectors.
"Our analysis of these fast-growing firms shows us that high-growth company founders can come from anywhere," said Dane Stangler, director of Research and Policy at the Kauffman Foundation. "Their firms can be found throughout the country and, rather than following the conventional expectation that high-growth companies are grouped into a narrow technology category, they represent exceptionally diverse industry segments. These findings offer important lessons for economic development leaders, such as to target firms that are high-growth rather than high-tech."
The study examined geographic trends of firms included in the 1982 to 2010 Inc. 500 lists to analyze for the first time how regional characteristics are associated with high-achieving companies and innovations. A survey of Inc. 500 founders from 2000 through 2008 also provided insight into the movement of these entrepreneurs from the cities of their alma maters to the locations where they founded their companies.
The first report in the series, "The Ascent of America’s High-Growth Companies: An Analysis of the Geography of Entrepreneurship," indicates that fast-growing Inc. firms encompass numerous industries beyond the sectors traditionally seen as the reserve of technology-based businesses.
While Silicon Valley, Austin, Texas, and other traditional high-tech hotbeds are well-represented among the cities that house high-growth companies, the research shows that Salt Lake City, Utah; Indianapolis, Ind.; Buffalo, N.Y., and several other Rust Belt icons also have accumulated a significant cache of Inc. 500 firms. The greatest number of Inc. firms is clustered in Washington, D.C., with nearly half of these firms operating in the government services sector.
The study also showed that spending growth in Washington, D.C., since the 1990s – regardless of which party held the White House – has fed the huge complex of fast-growing firms in the D.C. area. The growth of the private sector in the D.C. metro area, among the nation’s fastest-growing metro areas in the past two decades and the first to recover from the housing bubble in early 2009, then, ironically has deep ties to the federal government.
2010 Business Dynamics Statistics (BDS)
2010 Business Dynamics Statistics (BDS)
Source: U.S. Census Bureau
This Census Bureau brief highlights the most recent update to the Business Dynamics Statistics, which found that U.S. business startups have been declining since the 1980s and especially during the 2008-2009 recession. The report concludes that the U.S. has become less entrepreneurial as a result of the decline in startups and the lack of activity by young businesses. The BDS, which provides annual statistics from 1976 to 2010 by firm age and size, is crucial to understanding current and historical U.S. entrepreneurial activity. The BDS results from collaboration between the U.S. Census Bureau’s Center for Economic Studies and the Ewing Marion Kauffman Foundation, the largest American nonprofit organization that focuses on entrepreneurship. Internet address: <http://www.kauffman.org/bds2012>.
Further information on the BDS release can be found at <http://www.census.gov/ces/dataproducts/bds/data.html>.
Kauffman Foundation task force offers incremental approaches to unlocking obstacles to efficient health care reform
Cost trends in U.S. health care consistently increase at about 2.5 percentage points faster than the general rate of inflation – clearly an unsustainable rate. To address what it called “America’s most urgent public policy problem,” the Ewing Marion Kauffman Foundation released a report at The Atlantic’s fourth annual Health Care Forum in Washington today that focuses on improving the cost-benefit balance in American health care through open access to medical data.…The report, “Valuing Health Care: Improving Productivity and Quality,” is based on the recommendations of 31 experts from related fields, whom the Kauffman Foundation convened to reframe thinking around the question, “How can the productivity and value of American health care be increased, in both the short-term and long-term?”While acknowledging that there’s no shortage of reports and recommendations for health care reform, the task force took a unique approach to tackling health care value and productivity challenges.“Rather than look for a ‘one-shot-fix’ solution, the task force focused on incremental reforms that cumulatively can both reduce costs and enhance the value of health care delivered to Americans, regardless of whether and how the Affordable Care Act is implemented,” said Robert Litan, vice president of research and policy at the Kauffman Foundation and a task force co-organizer. “The underlying thread to the recommendations is leveraging big medical data.”
+ Full Report (PDF)
NFAP policy brief cites Kauffman-funded research that shows highly skilled immigrants could wait up to 70 years for a green card
NFAP policy brief cites Kauffman-funded research that shows highly skilled immigrants could wait up to 70 years for a green card
Source: Ewing Marion Kauffman Foundation (National Foundation for American Policy)
The National Foundation for American Policy released a policy brief today that says international students who graduate from U.S. universities with advanced degrees in science, technology, engineering, or mathematics (STEM) should get a green card with their diplomas. The paper also says such a policy would significantly benefit U.S. competitiveness and the economy overall.
In “Keeping Talent in America” (PDF), the NFAP conducted research funded by the Ewing Marion Kauffman Foundation that shows a highly skilled Indian national sponsored today for the most common skilled employment-based immigrant visa could wait 70 years to receive a green card. The report addresses the need for STEM graduate talent and solutions to the backlog.
Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation
Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation (PDF)
Source: Ewing Marion Kauffman Foundation
From press release:
Public discussion of the jobs shortfall in the United States has tended to focus on the Great Recession of 2007-2009, but new research released today by the Ewing Marion Kauffman Foundation suggests that the country faces a far more fundamental employment challenge that pre-dates the recession by many years: A long-term trend that the researchers call a slow jobs “leak.”
The new study, the next in a continuing series on firm formation and economic growth, found that the new businesses that continue to generate the bulk of the economy’s net job gains in recent years have been starting up with fewer workers than historic norms and are also adding fewer workers as they grow. Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation said its analysis of government data shows that since the middle of the last decade and perhaps longer, the growth path and survival rate of new businesses means they are generating fewer and fewer new jobs. The cohort of new firms that started in 2009, for example, is on course to contribute one million fewer jobs in the next decade than historical averages would suggest.
…
The study draws on data sources indicating a decline in the number of new “employer businesses,” those startups that create jobs for workers other than the owner. Citing data from the U.S. Census Bureau, the study found that the number of new employer businesses has fallen 27 percent since 2006. When including new employer businesses and newly self-employed workers, the level of startups has held steady or even edged up since the recession, according to the Kauffman Index of Entrepreneurial Activity. But that encouraging sign is somewhat misleading because firms that support only the self-employed owner do not scale to generate the new jobs needed to support overall economic growth.The study also examined young companies’ size at birth, jobs created and survival patterns of new firms. They found that historically, new firms in the United States have generated about 3 million new jobs every year, but that recent cohorts have performed much worse, creating only 2.3 million jobs in 2009. At the level of individual businesses, one data series (BLS establishment data) showed that in the 1990s new establishments opened their doors with about 7.5 jobs on average, compared to 4.9 jobs today.
The study also found that as a group, recent cohorts of new businesses have been adding jobs at a slower pace than earlier cohorts even when they do well and grow, but that growth hasn’t made up for lower employment levels at inception.
Kauffman Fast Facts: Entrepreneurship and the Economy
Kauffman Fast Facts: Entrepreneurship and the Economy (PDF)
Source: Ewing Marion Kauffman Foundation
From job growth and startup statistics to the impact of immigrants and state standings, the Foundation’s most compelling facts and figures are presented in this Fast Facts sheet.
Kauffman Index of Entreprenuerial Activity: 1996-2010
Kauffman Index of Entreprenuerial Activity: 1996-2010
Source: Ewing Marion Kauffman Foundation
From press release:
During the Great Recession, more Americans have become entrepreneurs than at any time in the past 15 years. However, while the economy and its high unemployment rates may have pressed more individuals into business ownership, most of them are going it alone, rather than starting companies that employ others.
According to the “Kauffman Index of Entrepreneurial Activity,” a leading indicator of new business creation in the United States, 0.34 percent of American adults created a business per month in 2010, or 565,000 new businesses, a rate that remained consistent with 2009 and represents the highest level of entrepreneurship over the past decade and a half. In contrast, however, the quarterly employer firm rate has dropped from 0.13 percent in 2007 to 0.10 percent in 2010.
See also: interactive visuals
Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers, First Quarter 2011
Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers, First Quarter 2011
Source: Ewing Marion Kauffman Foundation
After a year of increasing pessimism about the U.S. economy, the country’s top economics bloggers see a bit of hope on the horizon in 2011, according to a new Ewing Marion Kauffman Foundation survey released today. Although 77 percent continue to describe the economy’s overall condition as “mixed,” “facing recession” or “in recession,” 23 percent now believe the economy is “strong and growing” or “strong with uncertain growth” – an increase from last quarter.
With job growth an ongoing concern, bloggers this quarter were asked why high unemployment persists. An overwhelming 95 percent agreed that uncertainty is making firms reluctant to hire. They also cited structural changes in the demand for labor and a decline in aggregate demand. Asked whether they thought the recent extension of the 2001-3 tax cuts and the Social Security tax cuts would jump-start an economic recovery and job creation, a majority (66 percent) believe that those measures would be “effective” eventually, but not during 2011.
Survey respondents also took on the issue of the 2010 health reform bill. While opinions differed about whether it should remain or be repealed, seven out of 10 economics bloggers agreed that health benefits should be treated as taxable income.
+ Full Document (PDF)
