Startups create jobs; big companies destroy them

Vivek Wadhwa at TechCrunch does the numbers to prove that Google and Microsoft don’t create jobs, but your startup company will.

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What this showed was that startups aren’t just an important contributor to job growth: they’re the only thing. Without startups, there would be no net job growth in the U.S. economy. From 1977 to 2005, existing companies were net job destroyers, losing 1 million net jobs per year. In contrast, new businesses in their first year added an average of 3 million jobs annually….

So we can’t count on the Intels or Microsofts to create employment: we need the entrepreneurs. And there is an important lesson here for the states and cities that offer huge incentives to companies like Dell, Google, and Intel to locate their operations there. The regions should, instead, be focusing on creating more startups, not providing life support to technology behemoths.

One Slashdot commenter offered an interesting analogy:

Explorers discover or invent things. Pioneers are early adopter to integrate and make useful these inventions. Settlers reap and create a bussiness ecosystem around the places proven by pioneers. Apple has mainly been a pioneer, and microsoft a settler. Apple did not invent the GUI or Dynamic Memory, or Switching power supplies, or Post script or the Mouse. But they did pioneer the use of those technologies. Microsoft and dell/compaq settled those. They did not invent or truly pioneer MP3 players but they did advance that sufficiently to call it their own and then they settled it. Apple did not invent unix, but they did pioneer moving it from the etherial workstation market to the consumer market and now they have settled unix in the consumer market.

Other than their pioneering in search, Google is purely a settler in every market they occupy. Unix on devices, e-mail, documnet process, thin clients (aka “the cloud”).

So if a startup is an explorer in the innovation ecosystem, who are the indigenous people?