Economic Downturns Boost Success for Startups

A study on tech startups during economic downturns revealed surprising findings. Analyzing data from the U.S. Patent and Trademark Office on 6,946 startups between 2002 and 2012, researchers found that startups launched during the 2007-09 recession were 12% more likely to survive by their seventh year and filed more influential patents after their initial one. This success was attributed to the favorable labor market conditions during economic downturns, enabling these startups to attract and retain skilled employees, particularly in research and development. Additionally, founding inventors were less likely to leave during the critical initial years, highlighting the importance of labor stability for startup success.