After all the chatter and political rhetoric about how innovation and entrepreneurship is going to lead the way for us out of this recession, it's great to see some solid economic evidence that when it comes to job-growth in a recession, start-up companies aren’t just the best, they are the only player in the game!

 Dr. Tim Kane’s study on the “The Importance of Start-ups in Job Creation and Job Destructions” is a revelation even to die-hard fans of the start-up community like myself.  Start-ups for purposes of the report are firms and companies in year zero, so they inherently have an advantage, as the report concedes,  since they can’t really lose jobs in year zero. Some cheering points that I took away:

• Without start-ups, there would be no net job growth in the U.S. economy (true on average and only not so for all but seven years between now and 1977).
• In recessionary periods, (we know what that feels like) job creation at start-ups remains stable, while net job losses at existing firms are highly sensitive to the business cycle.

   The study hopes that its finding will shift the standard focus of employment policymakers away from the common media stereotypes of thinking of the issue of job creation in large aggregates and in the context of very large layoffs by established companies.  Also, the report hopes to be an alarm call to states and cities that have policies and incentives in place mainly to lure in larger more established companies because, if the analysis is correct, these are not real drivers of job creation.  Hopefully cities and states take notice and we have more policies in place to help the real champions of job creation – start-up firms that develop organically.