Startups, Job Creation and Economic Recovery
As we begin looking ahead to economic recovery from the COVID recession, I’ll be watching new business formation and job creation in Colorado. If our recovery from the Great Recession is any indication, startups and the jobs they create will be vital to our economy. In fact, startups will likely account for a majority of new jobs in Colorado.
The jobs created by startups accounted for about 80% of all net new jobs in Colorado between 2010, the first year after the Great Recession ended, and 2018, the latest year Business Dynamics Statistics have been reported by the U.S. Census. During that time period, more than 109,000 startups were launched in Colorado. They created 430,000 net new jobs out of a total of over a half million new jobs created by all businesses in the state.
Will this level of job creation by Colorado startups be repeated or even exceeded as we recover from the current recession? It’s too soon to tell, but there are reasons for optimism:
Colorado’s startup ecosystem is one of the highest performing in the nation. Our state is routinely ranked among the top 5 for innovation and entrepreneurship, including #3 on Business.org’s Best States for Entrepreneurs and Startups, #4 on Forbes’ Best States for Entrepreneurs, and #5 on CRN’s Best States for Entrepreneurship and Innovation.
Among all states in the U.S., Colorado had the second highest average number of jobs created by startups in their first year, according to the Ewing Marion Kauffman Foundation’s Indicators of Entrepreneurship.
Over the past 5 years, venture capital funding in Colorado has doubled, and despite the COVID recession, reached $2.21 billion in 2020. The state is in the top ten nationally for the number of venture capital deals and total capital investment.
Almost 79% of Colorado startups survive their first year of business, according to the Kauffman Foundation’s Indicators of Entrepreneurship.
The growth in new programs formed to empower more equitable, diverse, and inclusive entrepreneurship could produce an acceleration in startup launches and new job creation.
Entrepreneurs, startups, and the jobs they create are likely to play a powerful role in Colorado’s economic recovery from the COVID recession and in our sustained economic vitality. The more all of us – investors, mentors, accelerators, startup and business support organizations, federal, state, and local government, educational programs, and others – do to help startups succeed, the faster and more far-reaching our recovery will be.