It is almost impossible to overstate the economic importance of business start ups in San Diego and Southern California. The World Series is wrapping up, so let’s consider a baseball analogy.
In baseball, it can be difficult to accurately gauge the value of a rookie. Will a San Diego Padres newcomer shine or slump? It’s hard to know before the season begins.
It’s difficult as well for observers to accurately predict which business start-ups will succeed. However, we can gauge the importance to the economy of entrepreneurs being willing to gamble on themselves and their ideas by starting businesses.
A recent article on the importance of start-ups to the economy said about 20 percent of all new U.S. jobs are generated by new companies. About 50 percent of job growth can be traced to “fast-growing entrepreneurial firms,” the article stated, noting that most of these businesses have been around less than five years.
According to a recent report from the Kauffman Foundation, start-ups are sputtering in the wake of the Great Recession. In fact, this crucial jobs-generating economic engine has been in decline since the 1980s. Some reasons for the slide in start-up rates are obvious: the Great Recession’s housing collapse crushed large swaths of the construction industry, an important segment of the economy that is home to many start-ups.
Student debt continues to take a toll on start-ups as well. With so many graduates leaving college saddled with debt, more of them might seek the security of jobs with established firms rather than striking out on their own.
The good news is that the nation is discussing many of these issues and the housing market has held its ground. Some communities are seeing real signs for continued optimism, including our own.
For those interested in understanding more about the economic importance of business start ups and testing their ideas in the marketplace, it’s wise to sit down to discuss business formation, tax concerns, intellectual property protection, licenses and other concerns with the experienced attorneys at the Watkins Firm. We invite you to contact us or call 858-535-1511 for a free consultation to learn more.