Few Americans Work in Startups [CHART]

Recently released U.S. Census Bureau data indicates the share of employment in companies of different ages.  The figure below shows that, in 2009, only two percent (2%) of Americans working in private sector businesses were employed in companies started that year. Even young companies, those aged one-to-ten, only employed another 19.5 percent of private sector workers.

So where do most people in the private sector work?  The answer is mature companies.  The Census Bureau’s data reveal that 55.8 percent of those working in the private sector are employed in companies 26 years or older.  Another 8.4 percent have jobs in companies aged 21 to 25.  And 6.6 percent work in businesses between 16 and 20 years old.

Employment in startups, by company age


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

8 Reactions
  1. Scott, do you have an overlay of these statistics as they apply to companies categorized as small business? It would be interesting to see what the chart looks like after you remove Walmart, GE, etc. Thanks for the info.

  2. I’m actually very surprised at how even the numbers are from 1-25. I would have thought there would be more fall-off over that period. However, it’s not surprising that startups employ so few people and that large, mature companies employ so many.

  3. Scott, I was surprised to learn that startups employed such a small percentage of the work force in 2009. I work with the Campaign for Free Enterprise, a project of the U.S. Chamber of Commerce, and we know from our community of startups and entrepreneurs that they accomplishing a lot with the support of a smaller team, and as the saying goes, you have to start somewhere. With the changes in our nation’s economic environment, I’d be interested to see if the number of people employed by startups has shifted higher or lower. It’s our hope that it is higher and that perhaps our country’s next big employers are being founded right now.


  4. Great post Scott, another way to look at the data is that Startups will be responsible for 12.5% of the jobs in the next five years. This is 1 out of 8. The key is how to help these younger businesses survive – they offer a great return in terms of job growth if they can survive the early years. Helping these businesses survive the first five years can have a trickle down effect by preventing job losses in businesses that do not survive. The net effect would be to shift more jobs away from older businesses which one exception: StartUps and Younger Businesses are frequently acquired by older businesses, which could also bias the data.

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