Report Highlights Risks, Rewards Of Starting A Business

By Chris Bosak
The Hour, Norwalk, Conn.

WWR Article Summary (tl;dr) According to a new study conducted by the Federal Reserve Bank of New York, startups account for nearly all net new job creation and nearly 20 percent of gross job creation, meaning they create jobs without eliminating them at a rate much higher than established firms.

The Hour, Norwalk, Conn.

They may be young and small, but collectively they are a force to be reckoned with in the overall economy.

They are startups, and they account for one-third of all small businesses and a large portion of innovation and productivity, according to the Report on Startup Firms, the second in a series of reports based on the 2016 Small Business Credit Survey.

Conducted by the Federal Reserve Bank of New York and released last week, the report defines startups as small businesses that were five years or younger in 2016 and had full- or part-time employees.

Based on outside research, the report says startups account for nearly all net new job creation and nearly 20 percent of gross job creation, meaning they create jobs without eliminating them at a rate much higher than established firms.

“Startups are the primary drivers of U.S. job growth and their success is essential to a healthy economy,” Claire Kramer Mills, assistant vice president and community affairs officer with the New York Fed, said.

Western Connecticut boasts a healthy startup environment as evidenced by the number of new companies in a variety of industries launched in the last five years. According to the Connecticut Data Collaborative, there have been 4,333 business formations in Danbury from 2012 to 2016.

High hopes
Nelson Merchan, a business adviser at the Danbury office of the Connecticut Small Business Development Center, has worked with several local entrepreneurs who have launched businesses in recent years. He said optimism is high among the startup owners he has met.

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