Bringing the Economy Home

New Business Filings Decline in Idaho, Nationwide

A prominent DC-based think-tank says real growth in U.S. jobs is attributed primarily to new startup companies, not existing small businesses.  The Brookings Institution, a nonprofit public policy organization, reports most jobs created in the last 30 years have come from young, new enterprises.  In the video below, Brookings Senior Fellow Robert Litan says the age of a business is a better predictor of its job-creating potential than the size of that business.  Many successful startups began during periods of economic trouble, he adds.

Litan says the common perception is it’s small businesses that are creating half of the jobs in the U.S.  “But actually, it’s better to cut the data by whether a firm is new or old,” says Litan.  “The challenge for government policy is to keep that flow of new business going.”  Litan says the number of new business has been dropping over the last five years, and the number of people they’re hiring is also down.

Still, Litan says some of the greatest U.S. companies were founded during down economies.  “If you go back and look at the founding of our current fortune 500 and ask when they were founded, it turns out that 50 percent of our largest companies today were founded in either a bear market or recession,” Litan says.

In Idaho, the number of new companies is also down.  New corporations, nonprofits, limited liability partnerships and limited liability corporations must register their business with the Idaho Secretary of State’s office.  Those filings tell an interesting story.  In 2010, 21,917 new businesses registered in the state.  In 2006, at the height of Idaho’s economic boom, 29,883 new businesses registered.

Source: Idaho Secretary of State

Brian Greber is the director of Boise State University’s Business Research and Economic Development Center.  He says jobs will be created in Idaho a dozen at a time, through new startups and small business.  “Entrepreneurs will create the next big thing here,” Greber says.  “Something will crop up, who knows what it will be.”


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