Startup businesses are key to the economy.
Chen Yeh 23, Chen Yeh is an economist in the Research Department. Yeh joined the Federal Reserve Bank of Richmond in August 2019 after working as an assistant professor of economics at the University of Illinois at Urbana-Champaign. He earned his doctorate from the University of Chicago, Feb 2023, "Why Are Startups Important for the Economy?" https://www.richmondfed.org/publications/research/economic_brief/2023/eb_23-06
Young firms' up-or-out dynamics are important for an economy's growth. To perfect novel business concepts, a lot of experimentation is required. Success results in improvements in technology (which promote economic growth), but failure is inherent to the experimentation process to which startups disproportionately contribute. The 2018 paper "Growth Through Heterogeneous Innovations" quantifies that 25.7 percent of aggregate growth that comes through innovation is accounted for by entering firms alone.