Growth of new businesses has proven vital to innovation and job creation. Recent research demonstrating the aging of American businesses and downturns in American entrepreneurship has some worried about the future economic picture.
In an editorial for WashingtonMonthly.com, Dane Stangler, Kauffman Foundation vice president of Research & Policy, and Jordan Bell-Masterson, Kauffman Foundation research analyst, encourage a deeper examination of entrepreneurship activity and trends to understand what's behind the recent data.
Stangler and Bell-Masterson propose that incomplete data, undercounting entrepreneurship, and demographics might be what's behind the reported rates of declining new business activity. They conclude with an optimistic forecast for entrepreneurship.
Read an excerpt from the article below.
Can Millennials Reverse America's Declining Rate of Entrepreneurship?
There has been considerable hand wringing in recent months about research showing a decline in American entrepreneurship, a fall in "economic dynamism" (the turnover of companies and jobs), and an overall aging of U.S. businesses.
In the face of pessimistic long-term growth forecasts from the World Bank, International Monetary Fund, and Federal Reserve, these findings are worrying.
The founding and growth of new businesses has always been key to innovation, and young companies have been shown to be more prolific sources of job creation than their older counterparts.
The velocity with which these firms move in or out and up or down is what economists call economic dynamism. It is critical to rising living standards.
Read the entire article at WashingtonMonthly.com.