A positive byproduct of “startups” — defined as new private establishments open for less than a year — are the jobs they create. While Idaho’s startups account for a smaller share of private jobs now than in the 1990s, the state’s total employment has benefitted from them, growing from around 15,000 jobs in 1994 to over 27,000 jobs in 2024 — a 79.6% overall increase, or 2.2% annually.
Idaho finds itself in a healthy state of net job growth from startups, especially over the past 14 years when the greatest growth occurred. Figure 1 below plots the employment of startups in Idaho and the U.S. from 1994-2024. Despite a slight employment decrease in 2023, Idaho job growth from startups was again on the rise in 2024. Nationally, however, net job growth from startups dropped 14.6% from 1994-2024, a 1.4% decline per year.
Figure 1. Employment from startups, Idaho and U.S.
Source: Business Employment Dynamics (BED), Bureau of Labor Statistics (BLS)
In 2022, Idaho experienced the first increase since 2014 in the quantity of workers per each startup, while nationally the trend flattened. As seen in Figure 2 below, the average number of jobs per new startup increased again in 2024 for both Idaho and the U.S., despite the decrease in startups. This was the first consecutive-year increase in 16 years.
There has been a total employment increase of over 15,000 workers at startups in Idaho since 2010. At its peak in 2001, startups in the state employed an average of around six employees, while nationwide the average was 6.5 employees. Since 2006, neither the nation nor the state has been able to average more than six workers per startup formed.
The challenge since the 2001 peak has been that many fledgling businesses have become increasingly too small in terms of how many workers they can afford to hire. Or depending on the industry, they may require fewer workers due to innovations in technology, like automation. The state has worked to reverse downturns in new startup employment by offering tax incentives and workforce development programs to encourage hiring for new businesses.
Figure 2. Average employment per startup, Idaho and U.S.
Source: BED, BLS
Figure 3 represents the share of total private employment of startups over time in Idaho and the U.S. At its highest point in 2001, over 5% of total private employment in Idaho was from newly formed establishments. Even though startup growth has accelerated since then, the share of startup employment hasn’t recovered to this level. The year 2022 had the highest new establishment employment since 2007, but the new establishment employment share decreased to 3.6% in 2023, then remained flat in 2024.
Total private establishment employment continues to increase year over year statewide and nationally, but it’s still yet to be seen if the share of employment from startups will keep pace long-term. Meanwhile, Idaho continues to outpace the nation in the share of startup employment out of total private employment.
Figure 3. Employment from startups as a share of total private, Idaho and U.S.
Source: BED, BLS
Between 1994 to 2022, despite Idaho having historically higher-than-average entrepreneurship rates than the nation, the state also experienced higher-than-average startup failure rates. In 2022, startup failure rates were 30.5% for Idaho and 23.8% for the U.S., a 20-year high for both.
Since 2016, startup failure rates in the state have mirrored the national rates. However, in 2023, average start up failure rates made a sharp decline in Idaho from 30.5% to 25.5%, as Figure 4 highlights. Although cyclical, this a positive sign that startups both in Idaho and the U.S. were more viable than the prior two years, trending toward increased startup success.
Idaho’s economy has largely proven resilient with steady job growth and consumer confidence to support new businesses. Increased funding opportunities, like state-backed incentives and private investment, sustain startups. In addition, adoption of business incubator and mentorship programs have also provided resources for startup success and better strategies for entrepreneurs to enter markets.
Figure 4. Startup failure rate, Idaho and U.S.
Source: BED, BLS
In addition to the resulting jobs created, other economic indicators in Idaho and the nation include startup growth.
Figure 5 below shows between 1994 and 2024, Idaho’s annual number of startups grew from 3,249 to 8,548. This was a 163% net increase, or 3.3% on an annual basis, despite the recent decrease in the past two years. By comparison, the number of startups nationwide grew at a slower rate of 74.5%, or 2% annually.
Between 2020 and 2022, Idaho experienced a 55% increase in private sector startups from 6,537 to 10,115. However, from 2022 to 2024, there was a 15.5% decrease to 8,548 startups. As interest rates remain high, business consumer spending slows down and so does some business investment and expansion. However, the quantity of 2024 start-ups in Idaho are still higher than in 2021 when the state enjoyed such rapid and unprecedented start-up growth.
*Note the 2024 figures are preliminary and there may be revisions next year to the Bureau of Labor Statistics Business Employment Dynamics data from which these figures are derived.
Figure 5. Startups, Idaho and U.S.
Source: BED, BLS
Since 2012, Idaho has outpaced the nation in entrepreneurship rate — the ratio of startups relative to the labor force. There was a peak in 2022 with a rate of nearly 11 startups for every 1,000 Idahoans in the labor force, shown in Figure 6. Nationally, this rate was nearly seven per 1,000. However, in 2024, startup growth continued to trend downward in both Idaho and the U.S. with an entrepreneurship rate of just over eight per 1,000 and just under six per 1,000, respectively.
Figure 6. Entrepreneurship rate, Idaho and U.S.
Source: BED, BLS
The share of startups in business out of the total number of private establishments has somewhat tracked for both the state and nation, as shown in Figure 7. For eight years between the mid-1990s and early-to-mid 2000s, the share of startups out of total private establishments in Idaho has closely matched that of the nation.
With economic recovery after 2013, Idaho separated itself in a positive direction from the U.S. in relative startup shares out of all existing private establishments. However, between 2022 and 2024, both nationally and in Idaho, there was a declining share of startups (Figure 3).
From 1994 to 2004, the share of startups hovered around the 10-11% range both in Idaho and the U.S. In the leadup to the Great Recession, Idaho’s share grew to around 12% before plummeting to about 7% in 2010. Nationwide, it bottomed out at 8% the same year. By 2022, roughly 16 out of every 100 private establishments in Idaho were less than a year old compared with 12 out of 100 nationally.
As of 2024, this rate has decreased in Idaho to about 14 startups to every 100 private establishments; however, it still remains higher than the national rate of 11 for every 100. The share of startups is still higher than it was 20 years ago. Subtle downturns in the share of startups out of total private establishments also occurred in 2017 and 2020 for Idaho but rebounded in subsequent years.
Figure 7. Startups as share of total private establishments, Idaho and U.S.
Source: BED, BLS
Data from the U.S. Census Bureau’s Business Formation Statistics tracks new monthly business applications, which can be compared against new business formations in the U.S. and Idaho over time.
In 2024, Idaho had 2,810 new business applications per month — up 7% from 2023 and a robust 36% increase from pre-pandemic 2019. Nationwide, there were 392,496 new business applications per month — down 14% from 2023 but still a 25% increase from 2019.
It’s likely the increase in new business applications in Idaho since 2020 can be attributed to early stimulus capital — like low-interest Small Business Administration loans — encouraging entrepreneurs to take the risk to launch new businesses. Idaho’s population increase has also created an enhanced consumer base and new business optimism. The state offers a relatively more affordable environment to launch a new business with its lower cost of living and cheaper taxes compared with nearby states.
During the 2010s, applications for all businesses in the U.S. rose from a seasonally adjusted average of 200,000 per month to just over 300,000 per month. In Idaho and the U.S., more people than ever were submitting new business applications, however the follow-through to an actual startup remained a challenge.
Figures 8 and 9 below chart the correlation between new business applications and seasonally adjusted “establishment births”— new startups and reopenings of existing establishments. This is based on how many conceptual new businesses actually materialized into establishment births the following year after the applications were submitted.
From 2016 to 2021, business applications in Idaho increased to a higher level than ever. As expected, this resulted in new establishment births increasing dramatically, as shown in Figure 8. Although business applications have continued on an upswing for the state since 2020, subsequent new establishment births have not always materialized and have been in decline since 2021.
Figure 8. Idaho startup births and monthly business applications
Sources: U.S. Census Bureau, BED, BLS
New business application growth has been less consistent for the U.S. As shown in Figure 9, a drop in new business applications occurred both in 2022 and again in 2024. Private establishment births have also tailed off since 2022, nationally.
Expensive borrowing costs and uncertainty can discourage startups reliant on loans or venture capital. There has also been a post-pandemic correction in business formation rates. Persistent inflation likewise challenges new business viability with elevated costs for goods, services and wages.
Figure 9. U.S. startup births and monthly business applications
Sources: U.S. Census Bureau, BED, BLS
Note: Idaho and U.S. establishment births are estimates for 2024, Q3 and Q4
Note: This article is an updated annual scan of business startup activity since the 2023 report.
Ryan.Whitesides@labor.idaho.gov, regional economist
Idaho Department of Labor
208-696-2347
This Idaho Department of Labor project is funded by the U.S. Department of Labor for SFY25 as part of a Workforce Information grant (40%) and state/nonfederal funds (60%) totaling $885,703.
This workforce product was funded by a grant awarded by the U.S. Department of Labor’s Employment and Training Administration. The product was created by the recipient and does not necessarily reflect the official position of the U.S. Department of Labor. The U.S. Department of Labor makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership. This product is copyrighted by the institution that created it. Internal use by an organization and/or personal use by an individual for non-commercial purposes is permissible. All other uses require the prior authorization of the copyright owner.