THE BLOG

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Jonathan Cogley Headshot

Startup Tech Firms Drive U.S. Job Creation

Posted: Updated:

With an unemployment rate below 8 percent for the first time in years, the U.S. economy is finally seeing brighter days. Though political pundits and economists place blame and praise on a number of factors, one thing is clear: To avoid some of the pitfalls of this latest recession, many major U.S. corporations cut jobs here at home and outsourced them overseas.

Some might argue that this was simply good business. But some American companies are proving that capitalism and altruism can go hand-in-hand, and they aren't the big corporations -- instead, it's the startups, particularly in tech, that are leading an employment resurgence here at home.

In general, in times of boom and bust, startups drive the unemployment engine in America. New firms add an average of three million jobs per year -- a number that remains stable during recessions -- while existing firms are, on average, net job destroyers.

Outsourcing has recently fallen out of favor as political pressure rises on the companies that do so. But even though 2012 saw fewer contracts than the five-year average for the practice, there were still $6.77 billion in outsourcing contracts awarded last year. Think of how that money could be spent on hiring here at home.

Meanwhile, tech is one of the few American fields to remain strong during the past few years. As of last year, the app economy alone generated nearly half a million jobs. As the demand for apps and mobile devices continue to increase, more startups will form to meet the need. If anything, there will be too many jobs, as there is a dearth of tech talent available stateside.

My own software company, Thycotic, made a commitment to keeping employment local. Although the supposed economic benefits of cheaper labor in other countries have lured other CEOs into outsourcing, the benefits of face-to-face communication, a local time zone and common culture are, for me, too important to ignore. And we are experiencing explosive growth with this strategy, with a 30 percent staff increase and doubled revenue since last year.

Indeed, in many ways, staying local is imperative for tech startups: The first employees of the company must be prepared to take on roles beyond their job description, work flexible schedules, and adapt to the company culture. This is only possible if everyone is, at the very least, in a similar time zone, if not the same city or office.

A commitment to U.S. job creation is thus imperative for tech startups and for the country on the whole. While major corporations only focus on their own bottom line, entrepreneurs like myself are helping to build not just companies, and not just an industry, but a national economy. The opportunity is there -- we just need more American entrepreneurs to step up and onshore their jobs.

Jonathan Cogley is founder and CEO of Thycotic Software, a Washington D.C.-based security software company best known for Secret Server - enterprise password management software used by over 65,000 IT administrators in companies throughout the world.