New Business Births are Vital

More research is coming out supporting the importance of new business formation to state economies.

This from the Small Business Research Summary of the SBA Office of advocacy "Small Business and State Growth: An Econometric Investigation":

Small firm establishment births have a larger impact than any other factor examined on GSP (Gross State Product), SPI (State Personal Income), and total state employment. In fact, the authors find that small firm establishment birth rates and death rates have equal and opposite effects on state economic growth....

The authors conclude that this general finding reveals that state efforts to promote small business formation will be more fruitful in terms of generating economic growth than virtually any other policy option in our models.

The thousands of new business that start up each month do matter. New businesses are a serious source of growth in income and employment. The more research I come across about new business formation only proves the value of entrepreneurship to the economy.

PB