EDB: Creation of startups stabilizing
By John McPhaul
Economic Development Bank for Puerto Rico (EDB) President Luis Alemañy González said Monday that through the recently created Center for Economic Studies, data collected by the United States Bureau of Labor Statistics reflected signs of a stabilization in the level of employment in Puerto Rico in the emerging business sector, “startups.”
He said the sector approached pre-pandemic averages during its most recent semester.
“The strengthening in the non-agricultural salaried employment sector was reflected in an increase of 22,400 jobs between January and June 2021,” Alemañy González said in a written statement. “The increase would coincide with an expansion of existing businesses or the opening of new establishments during the first and second quarters of 2021. The demand for the hiring of employees may also arise due to the economic stimuli granted as part of the response to the pandemic.”
“This data goes hand in hand with the activities that the governor of Puerto Rico, Pedro Pierluisi, is promoting and executing to promote the economy and create jobs,” he added.
Alemañy González noted that the objective pursued by the EDB’s Center for Economic Studies is to keep the business community informed about macroeconomic and financial matters that could impact their business decisions.
Meanwhile, EDB economist Gladys Medina added that “[d]espite the fact that at the beginning of 2020 more businesses disappeared than opened, the total number of startups was higher at the end of the year.”
“For example, during the first half of 2020, 722 startups opened and 971 closed, generating 3,126 jobs and causing the loss of 3,981, respectively,” she said. “As of the fourth quarter of 2020, 1,037 establishments were born, generating 3,443 new jobs.”
“But the rate of start-up businesses remained close to pre-pandemic levels in the fourth quarter of 2020, reaching 2.5%, although this average is 0.7% points less than the previous quarter,” Medina emphasized.
“From the numbers it is also clear that, although the number of emerging businesses is stabilizing compared to the decline related to COVID-19, the average employment of these establishments has decreased during the last two years,” added Juan Carlos González, another EDB economist.
Alemany González reiterated that “as of the second and third quarters of 2020, the number of new startups exhibited an upward trend.”
“However, the use of openings is limited,” he said. “This could be due to the fact that the profile of emerging companies is one that is aimed at the development of smaller businesses.”