With the current state of a slowly recovering U.S. economy and a labor market that continues to fluctuate, economists across the nation are looking for ways to help boost job creation. But New Engine/Kauffman Foundation research published earlier in August highlights that the answer to increased employment opportunity might be right under our noses — and it all starts with the heightened creation of new tech businesses.
Hi-tech startups that work to challenge long established tech companies such as Google (NASDAQ:GOOG) and Amazon.com (NASDAQ:AMZN) make headlines daily with their recent innovative products (emotion-reading glasses, for Google) and consumer promises (original programming, for Amazon), but while many readers glance over these articles with disinterest, what they don’t realize is that it is thanks to these high-tech companies that thousands of jobs are created each year. Ewing Marion Kaufmann Foundation points out that job creation at these high tech companies far offsets the initial destruction that occurs when startups meet with early-stage business failures. That separates them from companies in the U.S. private sector as a whole where “job losses from early-stage failures turn this group into net job destroyers.”
Thus, new research recognizes that high-tech startups harness a considerable amount of job-creating power, and therefore their formation must be encouraged rather than neglected. Their numbers are also on the rise, and the study points out that high-tech firm births were 69 percent higher in 2011 than in 1980, while private sector job creation decreased 9 percent.
In addition, the report reveals the increasing diversity of these high-tech startups’ locations, proving that they are becoming more geographically diverse, and marking another distinction which sets them apart from other sectors whose new businesses tend to cluster together in one region. Here are the top six metro areas for high-tech startup density: