Commercialization:

New Business Creation and Company Closings

Key message

Startup firms have the potential to grow rapidly and provide leadership in developing new markets that benefit both emerging and existing businesses around the state. Oregon's high rates of both business creation and company closings highlight the need to continue to encourage entrepreneurship and support small business owners, especially during the critical first years in business.

Why is it significant?

New companies create new jobs, which expand and strengthen economies. The rate of new company formation is an indication of an innovative and dynamic economy. Company closings threaten the vitality of an economy but they also provide an opportunity for talented people to introduce new ideas and ventures into the market.

How does Oregon perform?

In 2008, Oregon ranked 14th in the nation in the number of new businesses started per 1,000 persons in the workforce. This strong performance exceeded the US average but trailed a number of competitor states. See Figure 14 & 16.

Oregon ranked 15th in the nation in the percentage of business closings between 2007 and 2008. Like many competitor states, Oregon appears to have a very dynamic economy, characterized by high rates for both business starts and business closings. See Figure 15 &17.

Figure 16. New Company Creation per 1,000 Workers

State	2008 Rank	2003	2007	2008
Idaho	2	13.4	15.9	15.1
Colorado	4	12.9	14.0	14.1
Utah	9	12.7	13.9	13.1
Oregon	14	11.5	11.9	11.5
Minnesota	16	9.2	7.3	11.1
New York	18	11.1	10.9	10.6
Arizona	27	8.4	10.4	9.8
Washington	29	11.6	9.7	9.6
California	30	9.3	9.7	9.5
United States		9.5	9.0	8.8

Source: Bureau of Labor Statistics; U.S. Census Bureau

Figure 17. Percent of Company Closings

State	2008 Rank	2003	2007	2008
Idaho	3	16.5%	18.8%	21.8%
Colorado	5	19.3%	19.5%	21.2%
Utah	6	19.9%	18.1%	20.7%
Arizona	8	18.4%	18.9%	20.4%
Oregon	15	17.4%	16.6%	18.0%
New York	18	18.4%	17.2%	17.6%
Minnesota	19	15.4%	19.1%	17.3%
Washington	33	13.9%	14.3%	14.9%
California	49	13.7%	13.7%	13.2%
United States		15.8%	15.0%	14.9%

Source: Bureau of Labor Statistics