Michael Jeanfreau, Senior Economist
Here in the desert, Utah continues to grow in population, overall income, employment, and GDP. The pioneer spirit in the state’s culture aligns with entrepreneurship. State-led efforts, along with Utah’s favorable demographics and business climate, help new companies find the skilled workforce and support they need.
Utah’s startup scene thrives thanks to a fast-growing population and a robust economy. As one of the country’s fastest-expanding states, Utah blends a youthful workforce with a strong education base, which creates a prime setting for business growth. In 2025, WalletHub ranked Utah the 3rd best state to start a business, highlighting strong access to both talent and capital. Meanwhile, Utah’s business tax rate as a percent of GDP was among the lowest in the nation, an advantage noted by the Kem C. Gardner Policy Institute. The result is an ecosystem where startups sprout alongside established firms in technology, life sciences, outdoor products, finance, and other sectors. Utah’s growth-focused culture and wide network of startup supporters, from university innovation labs to business associations, draw inventors and entrepreneurs from all over, reinforcing a cycle of knowledge-sharing that strengthens the broader economy.
Labor Market as a Gauge of Startup Activity
One way to gauge the health of Utah’s startup environment is by tracking firm creation and the jobs these new ventures bring. Employment data offer a direct look at whether an increase in startups translates into real economic gains. Two federal programs form the backbone of this analysis:
Business Employment Dynamics (BED), from the Bureau of Labor Statistics (BLS), tracks quarterly job changes driven by new (or closing) establishments. Since BED highlights how many positions open specifically at new businesses, it reflects Utah’s “entrepreneurial pulse.”
Quarterly Workforce Indicators (QWI), part of the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics program, breaks down workforce details such as turnover, firm age, and industry. By revealing how many people work at firms aged 0–1 years, 2–3 years, and beyond, QWI shows how startups compare to more mature businesses in terms of hiring and retention.
Together, these sources help measure the impact of new startups on the labor market. BED data can pinpoint the exact quarters when startup-driven hiring surges, while QWI goes deeper into the stability of those jobs, noting whether young firms attract and retain workers. This focus on employment helps capture the broader ripple effects of entrepreneurship—business openings can signal economic optimism, but it is the resulting workforce growth that makes it clear how new firms are reshaping the labor market.
Employment Is Mostly in 11+ Year Old Firms
Source: Quarterly Workforce Indicators, U.S. Census
According to recent QWI data, 78.4% of all stable employment in Utah comes from firms aged 11+ years, or about 985,000 positions. “Stable employment” refers to a job held for more than just one quarter. Stable employment is detected by QWI by the presence of earnings for an individual from the same employer for three consecutive quarters; when this occurs employment in the middle quarter is treated as “stable” employment. The youngest firms (0–1 years old) have a higher concentration of their jobs in sectors such as construction and accommodation/food services, where overhead is relatively lower. Among more mature companies, the industry mix is different. Overall employment in older, established firms more often operate in manufacturing, retail trade, or health care—fields that generally require greater capital, broader logistics, and a long-term presence. Large retailers have typically been in business for decades, manufacturing has a large overhead cost, and hospitals and large health care institutions need time and resources to develop. Over the long run, the natural aging process of businesses means these capital-intensive, mature sectors dominate the bulk of stable employment.
Young Firms Keep Adding Jobs
Source: Quarterly Workforce Indicators, U.S. Census
Even though older firms employ most workers, young firms (0–1 years old) show steady hiring activity. In 2023, firms in this age group posted an average quarterly job increase of 5,000 positions. By contrast, companies older than 11 years averaged only about 240 new hires per quarter. Mid-aged firms (4–10 years old) saw mild declines.
This pattern partly reflects survivorship bias, a phenomenon in which only successful or still-operating entities remain visible in the data. New firms showing high growth rates may appear robust, but the many startups that fail then drop out of the dataset when they close. As a result, the youngest bracket tends to look more dynamic, not necessarily because every new firm thrives, but because they haven’t yet had time to fail. This process shapes the impression that the 0–1 year category is always full of high flyers, when, in reality, it reflects the successes that made it past the initial hurdles. In Utah, BED data shows that from 2010-2019, around 78% of new private establishments survive their first year, and around 50% survive to year five.
Young Firms Experience High Turnover
Source: Quarterly Workforce Indicators, U.S. Census
Despite creating a large share of new jobs, young firms also tend to have higher turnover, meaning they have more hiring and separation events relative to stable employment. In the most recent QWI figures, 0–1 year old companies had a turnover rate of 19%, while older firms (11+ years) had a rate of 9%. A turnover rate of 19% means that in the time period measured (typically a quarter), about 19 out of every 100 employees at these very young firms either left or were replaced. In other words, it’s the fraction of the workforce that “turns over” during that period. By contrast, a rate of 9% means that older firms replace or lose only 9 out of every 100 employees in the same timeframe. A 19% turnover rate indicates that staff are coming and going at nearly twice the pace in young companies compared with older ones.
Establishment Net Gains (BED)
Source: Business Employment Dynamics, U.S. Bureau of Labor Statistics
Data from BED reveal that Utah gained a net 66,202 establishments between 2018 and 2023, placing it 18th among all states for total net growth. Although larger states including Texas, Florida, or California outpace Utah in raw numbers, Utah’s performance is significant given its smaller population.
Establishment Gain per 1000 residents
Source: Business Employment Dynamics, U.S. Bureau of Labor Statistics
Comparing net establishment gains to population size offers another perspective. From 2018 to 2023, Utah’s rate of new establishments created per 1,000 people was 19.9, placing the state second in the nation behind Idaho. The median for all states is 9.8, which means Utah’s figure is roughly twice the typical state’s rate.
Establishment-Per-1000 Gain Map
Source: Business Employment Dynamics, U.S. Bureau of Labor Statistics
When viewed on a map, the Mountain West emerges as a regional hotspot for per-capita establishment growth, with Idaho and Utah significantly outpacing most other areas. The top 5 states for establishment-per-population gain are all geographically close, suggesting regional factors such as high population growth via in-migration and natural increase may be positively affecting start-ups. Other factors such as an above-average education in Utah or comparatively favorable business tax rates and industrial ecosystem could also help promote startup activity.
Conclusion
Utah’s startup scene has been gaining ground thanks to a young workforce, a friendly business climate, and a culture that values new ideas. BED data show strong net job gains from business openings, and QWI data confirm that new firms, especially in tech and service industries, keep the labor market fresh. While many ventures do not make it past a few years, those that do often grow into significant employers. As Utah continues to enhance access to funding, training, and broadband, the state may well reach its goal of expanding startup activity by 50% by 2029.