Exposure to prolonged or repeated recessions, however, does adversely affect job creation. Firms that weather many recession years seem to consistently have lower levels of employment, the study showed, with startups surviving through three recession years having about 10 percent less employment than those surviving through none. This amounts to a difference of about 300,000 jobs, or around 0.2 percent of all jobs in the economy. While the number of jobs lost due to prolonged or repeated recessions appears to be small, these small differences might compound over the years and across groups of companies to create a lasting mark on the economy.
The current recession is the longest in several years; thus, startups established right before or at the beginning of the current recession might have been significantly affected.
Which is probably why companies that have been through recessions don’t immediately re-hire when the government statistics tell them the recession is over.
This recession was a bit different, in that fewer laid off people started companies than previously. Economists are still trying to figure that one out. Me, I think people are just shell-shocked by the real estate recession, the wild ride on Wall Street, and a slew of natural disasters. It’s a wonder anyone gets out of bed.
However, we’ve got to get these new company formations moving again. The question all entrepreneurs should be asking each other is what can we sell that people need, that involves people? Almost like a commune for the country? Can we get together and create a new reality? And if we come up with the ideas, there is definitely venture capital and angel capital to fund them. It just doesn’t want to fund another “me too” idea.
I’ve written about this before, and I’ve suggested infrastructure. Why not build the smart grid? Or the new water and sewer purification system? I also think small businesses are underserved. What about more micro-finance to disrupt the big banks that keep cutting those credit lines and credit limits small businesses depend on?
Smart people read this blog. Is anybody incubating some great idea in his/her mind? I would love to work with you on a world-changing project that would set the US back on track and restore optimism and energy. I am tired of listening to everybody piss and moan, including myself, about the state we are in:-)
