Report Shows Two Thirds of New Jobs Come From New Companies

The Kaufmann Foundation, a non-profit organization that focuses on entrepreneurship, issued a report prior to the latest unemployment figures showing that two thirds of the jobs created in the U.S. in 2007 came from new companies. While the manufacturing sector continues to shrink and financial institutions continue to consolidate, the entrepreneurs are feeding a steady supply of new jobs into the economy.

"Job creation is the number one issue facing families and policymakers during this economic recession, and this study shows that new businesses and entrepreneurs are the key factor in adding new jobs," said Carl Schramm, president and CEO of the Kauffman Foundation. "If the U.S. economy is going to have a sustained recovery, it will be up to entrepreneurs to lead the way."

This report draws on a new set of data, a Special Tabulation conducted by the Census Bureau at the request of the Kauffman Foundation, calculated from the 2009 Business Dynamics Statistics (BDS). The BDS includes measures of business startups, establishment openings and closings, and establishment expansions and contractions in both the number of establishments and the number of jobs. It shows the churn factor created by the established - and extinguished - new companies that both add and subtract jobs. The net of new jobs each year, according to the report, is two million.

Where are those jobs? The Kauffmann report supplies no details on that question, but the U.S. Labor Department has a number of detailed projections. The opportunities for health care careers will retain their high level. Information technology degrees will continue to open many doors, although some analysts see a leveling off of new opportunities in software design and increases elsewhere.

A computer science degree will remain a hot ticket because it allows the graduate opportunities in both the development field and in various business applications such as systems analyst and network administration. In other areas, the maturation of established business will complement the job growth in new industries. Some of these growth areas are career options for graduates with the right associate's degree.

Most of these call for bachelor's degrees, but the role of the computer repair technician and database administrator often do not. Keeping both workstations and networks functioning properly often falls to service businesses, and those opportunities will continue to increase with business both from startups and established firms.