The Latest in IT Security

By Sarah McBride SAN FRANCISCO (Reuters) – Sluggish growth among young technology firms could bode trouble for the U.S. economy, according to a new report from the Kauffman Foundation. The number of technology firms aged five years or younger – key drivers of job creation – has fallen to below 80,000, down from a high of 113,000 in 2001, according to the report. Factors that could help account for the drop include a tendency of older technology companies to acquire increasingly younger technology firms, taking them out of the pool of young companies prematurely, said report co-author Ian Hathaway in a telephone interview. Separately, many old-line Silicon Valley companies buy start-ups simply to acquire their talented engineers in a phenomenon that has become known as the acquihire. Focus on highly successful young technology companies such as online-bulletin board Pinterest and microblog Twitter draws attention away from the fact that the overall pipeline is thinner than previously, said Hathaway, research director at Engine, a policy group funded by start-ups.