With Maine’s third annual Startup and Create Week set to kick off in two weeks, it is time to take a look not at Maine’s human birth and death rates, but at our business birth and death rates.

Recognizing that not all of the companies that the Department of Labor classifies as “newly opened establishments” are truly “startups” – some may be reorganizations, breakups, those emerging from bankruptcy or from sales to new owners – it is, nonetheless, useful to see what the “birth” and “death” data say about the nature of business and employment growth in Maine over the past several years.

Looking at the number of business “births” – newly established entities filing payroll reports – the news since the trough of the Great Recession is generally positive.

The four-quarter moving average of the number of new business openings in Maine has risen from 927 in the fourth quarter of 2009 to 1,038 in the third quarter of 2015 (the most recent data available). Over the same period, Maine’s new business “birth rate” (the number of new establishments as a percent of the total number of reporting establishments) has increased ever so slightly from 2.5 percent to 2.7 percent.

This is certainly good news. But it does not match the activity in Massachusetts, where the number of new establishments rose from 3,887 to 6,495 over the same period, and the new business birth rate jumped from 2.3 percent to 3.4 percent.

It is interesting to note that the establishment “death rate” in Maine over the same period also fell slightly from 2.9 percent to 2.4 percent, while the death rate in Massachusetts remained about the same at 2.5 percent. This may indicate a greater business churn in Massachusetts with rising birth rates accompanying stable death rates being an indicator of failures being followed by renewed startup efforts – a positive sign of a strong entrepreneurial culture.

After examining the simple number of births and deaths – new businesses and dying businesses – it is important to trace this startup activity to job creation.

In Maine, the 927 new establishments in 2009 accounted for 3,503 employees, for an average of 3.8 employees per new company. In 2015, 1,038 new companies accounted for only 2,755 employees, for an average of 2.7 jobs per new company. In short, new Maine companies in 2015 are creating fewer jobs than did the new Maine companies of 2009.

Interestingly, the same phenomenon holds true in Massachusetts, where the average number of new jobs per new company fell from 3.6 jobs per new company to 2.9 jobs over the same period. This trend calls for a closer look at the regulatory procedures surrounding employment growth in new companies.

The central take-away from this quick overview of basic business demographics over the period of slow economic recovery since the end of the Great Recession is that while startups (new business formation) are important to economic vitality, they are far from the whole story. Maine needs to examine the entire ecosystem in which new businesses grow (or do not grow).

While it is encouraging to see Maine’s business “birth rate” rising, it is alarming to see how small the new “babies” are. We need to identify the elements surrounding healthy business growth and work to assure that they are more readily available in the economic culture and atmosphere in which new Maine companies must make the initial “life and death” decisions of their young lives, decisions that will go a long way in determining Maine’s future economic growth.

What are these elements?

As with young children, they are obvious and very basic when we consider the issue carefully – attention, celebration, care, mentoring, instruction, regular interaction with peers and some well-focused financial support.

Just as the saying goes about raising a healthy, energetic, creative, self-motivated child – it takes a village – so it is with new businesses. We must pay close attention not just to the process of birth, but also to the process of guiding the newly born to maturity.

Charles Lawton is chief economist for Planning Decisions, Inc. He can be contacted at:

clawton@planningdecisions.com