Originally published 2/23/2007
Another way to see the turnover, or churning, that takes place in an economy is to consider business startups and closures. In the US in 2005 there were about 672,000 new businesses (with employees) created while about 545,000 businesses shut their doors. The total number of businesses in the US with employees are about 5.8 million. (only 17,000 businesses have more than 500 employees) Thus, about 10% of the business stock is refreshed each year with a small net gain each year being the norm. (See this SBA FAQ [dead link]).
In the UK, the churning is similar. In 2005 there were 178,000 new businesses and 153,000 closures. This is also about a 10% turnover each year. (See this SBS report)
I would be curious to know what these numbers, and the employment churning looks like in other countries, especially in France and some of the Scandanavian countries. If anyone knows these please post.
