U.S. Census, Statistics of U.S. Businesses (SUSB)
Vermont has enjoyed a high rate of business startups, with many firms that have gone on to be successful national and international brands. Recently Vermont’s rate fell below the national average. Here the startup rate is measured in terms of the number of new firms per worker. The startup rate has been slowing, despite a relatively flat base – number of workers. In the historic economic data we see the long term effects of the recession on entrepreneurship. Some factors to explain the trend include an aging workforce, equity loss, tight credit markets and consumer spending trends. 2013 looks to have had the lowest startup rates recorded (since 1980).
Source: U.S. Census, Statistics of U.S. Businesses (SUSB) & BEA
The Business Startup rate is the number of new firms per 1000 employees in that sector, making it possible to track activity levels across sectors and also to compare with startup dynamics nationally. In this time period Vermont saw 1,448 firm “Births” or startups, and 1,565 “Deaths”. There were 5,055 expansions adding 20,265 employees, and 4,636 contractions shedding 18,928 jobs. Startup rates are influenced by a variety of factors. They tend to be strong where there is demand, expertise and a talent base, where barriers to entry low or investment available.
Source: U.S. Census, Statistics of U.S. Businesses (SUSB) & BEA.
Vermont business startup rates by sector are benchmarked here to national levels of startup activity. This data is only for firms with employees. Startup activity is driven in part, by the existing base of activity in that industry or sector. These conditions contribute to a knowledge and workforce base, a base of entrepreneurs, and related business services.
Source: Business Dynamic Series U.S. Census
Firms that were started in the last 10 years employ 29% of Vermont’s workforce. Nationally it’s nearly 39%. In contrast, 70% of Vermont’s workers are employed in businesses over ten years old (61% nationally). Vermont relies strongly on its established employers.
Source: Business Dynamic Series U.S. Census
Vermont has exhibited a strong survival rate among new businesses, measured in terms of the number of firms that make it to the 5 year mark. From 2012 to 2014 rate of business successes improved – going from 52% to 54% of firms surviving 5 years. However, gains in other states nudged Vermont lower in national rankings: Vermont fell from 6th highest nationally to 12th (inlcuding the District of Columbia). Combined with the rate at which startups are being formed, survival rates give a view into growth among firms that comprise the state’s private employment base.