The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy.
U.S. BUREAU OF LABOR STATISTICS
Spotlight on Statistics
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JANUARY 2022
Business Employment Dynamics By Age And Size Of Firms
Akbar Sadeghi
In 2019 there were more than 420,000 startup firms. These startups were responsible for almost 1.7 million job gains
in 2019, while having, on average, only 4 employees at the birth of the startup. Older firms—those that have been in
business 10 years or more—accounted for most of total employment in 2019, but startup firms accounted for most of
the employment growth in 2019. This Spotlight on Statistics highlights these startups, which are an essential part of
the U.S economy. The Spotlight examines data on the age and employment size of firms from 1994 through 2019.
U.S. BUREAU OF LABOR STATISTICS
Spotlight on Statistics
Page 2
New businesses increased from 2010 to 2019
Startups are firms or establishments that are less than a year old. An establishment is an economic unit that produces
goods or services, usually at a single location, and engages in one or mainly one activity; a firm is a legal business
and may consist of one or several establishments. Startups usually rise when the economy expands and fall during
economic downturns. The annual number of startup firms began to decline several quarters before the 2007–09
recession and was at its lowest in 2010. After the recession, the number of new firms began to rise and exceeded the
long-term average of 400,000 firms annually from a low of 326,000 in 2010. The number of establishments less than
a year old also declined sharply during the 2007–09 recession and then grew afterward, reaching a record high in the
year ended March 2019.
The firm-level age and size designation in these series are measured by age and size of the parent company and are
assigned to every establishment in that firm. For that reason, establishment counts are higher than firm counts
because, in addition to new businesses, they include new plants, stores, branches, or other locations of existing multi-
establishment firms. Firm cou