Though the U.S. job market has been slow to recover from the recession, the unemployment rate has fallen to 8.8 percent from 9.8 percent in November, and there has been sustained growth over the past five months. In a jolt of good news for those looking for work, a new survey released this week showed that startups are increasingly optimistic about the economic climate and plan to continue to hire additional workers this year.
The survey, Startup Outlook 2011, was released on Friday by Silicon Valley Bank, which works with venture capital and technology companies throughout the world. The bank surveyed 375 U.S.-based private, VC-backed software, hardware, life science and cleantech companies and found that a majority of startups are bullish on the direction of the U.S. economy.
According to the survey, a majority of startups believe the economy will continue to improve as the year goes on. Of the companies polled, 83 percent plan to hire this year, representing a marked increase from the 73 percent of businesses that said they would add workers during last year's survey.
The burgeoning confidence that startups have in the economic recovery is especially important as small businesses are historically responsible for a majority of hiring in the U.S. following economic contractions. According to Silicon Valley Bank chief executive Greg Becker, the planned hiring illustrates the success that startups have experienced over the past year – even as the economy struggled to expand.
"This new data, however, clearly shows that technology companies met or beat their 2010 revenue targets, are still experiencing improved business conditions and are creating U.S. jobs," Becker said in a statement. "There is no question that the innovation sector is making a tangible impact on the U.S. economy and our ability to compete globally."
Nonetheless, the startups surveyed also said that securing loans and working through complex regulations could impede future growth. Life science startups were particularly concerned about new regulations, with 64 percent of these companies affirming their ability to grow is significantly hurt by new rules. Further, 83 percent assert the government could help them expand by streamlining the FDA approval process.
Mary Dent, the general counsel and head of government relations for SVB Financial Group, said the survey is meant to help entrepreneurs succeed and to highlight potential impediments to growth they face to policymakers. "We launched Startup Outlook last year to help bring entrepreneurs' issues and ideas to policymakers so they can help create an environment in which American innovators can build thriving businesses in the U.S," Dent affirmed.