In a regional census conducted by Fosterly’s, Fairfax County was found to have the highest density of startups in Northern Virginia. In fact, Northern Virginia is home to 32 percent of startups in the region. This is second only to DC, which came in at 40%.
Fairfax County and the Fairfax County Economic Development Authority sponsored this research with a few other participants in order to get a better look at our area’s innovation ecosystem. Driving the diversity in the economy and growing it at the same time is a focus of Fairfax County.
Fairfax is the headquarters location to 14.5 percent of startups, which has amazing potential for the area. Most startups make their money from sales to the private sector, not the government, so the local economy is what benefits most. Data shows that 77 percent of startup revenue comes from private sector sales, including business to business sales.
The census that was conducted is an indicator of our region’s growing entrepreneurial scene which includes an evaluation of the number of firms formed, jobs created and the generated revenue
Most of the startups were founded within the last five years. 25% of those surveyed set up shop in 2016, which is a clear sign of a growing trend. This growth is particularly noteworthy as a positive sign, as national economic data is showing that startup creation is at a 40 year low in the U.S. Recently, only 8.9 percent of companies were in business for two years or less, according to the U.S. Census Bureau as of the 2014 Census of entrepreneurs.
Fosterly’s results also point to positive job growth for our area. 83 percent of companies will hire full or part-time employees in the next year, with 22 percent targeting to hire five to ten people. Startups employ 3 percent of the nation’s job force each year. They actually account for up to 20 percent of net jobs created.
The large impact on our local economy and community is one reason Fairfax County officials are trying to foster more startups for our area and improve overall entrepreneurship as part of their Strategic Economic Success Plan. Fairfax is trying to diversify the county’s economy as federal budgets are expecting to be strained in the coming months. Officials are hoping to attract and expand in areas of emerging technologies such as data analytics, cyber security and translational medicine.
Fosterly’s results also show a rise in revenues. This year, 45% of startups are projecting revenues more than $500,000- this is twice the number that exceeded this same mark in 2015. There are also firms projecting a $2 million revenue year or greater, which is more than double this year than compared to two years ago.
These results show great promise for the growth and expansion of our community. Having local businesses owners succeed helps everyone. Job growth and commitment to improvements in our area are amazing advantages of seeing a small company startup and grow. Knowing that our community is leading the way is very exciting.
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