Declining firm dynamism, in this context, refers to the reduced market competition that makes the path for entrepreneurship harder. We can see the decline in dynamism in several areas: long-trend decline in the startup rate; increasing firm concentration; high-growth startups struggling compared to historical performance; increasing inequality among firms and among wage earners; unequal geographic performance; and decreased movement among firms by employees.
Americans are in the midst of a transformative change where technology is fundamentally changing many aspects of our personal and work lives. Technological advances will continue to replace the need for some traditional jobs, but technology can also create the opportunities for new jobs in nascent or currently nonexistent industries.
As technology continues to change work and employment, we face a wide range of consequences and potential futures. Much of the media attention on this topic has focused on the rise of the “gig economy” with particular focus on firms like Uber. This type of work arrangement is not new, but there is no question that technology has unlocked its potential.
The future of work is far more than the proliferation of Uber-like business models. There is tremendous growth in alternative forms of work arrangement—work arrangements beyond the traditional employer-employee model. Katz and Krueger estimate, in 2015, workers with alternative work arrangements accounted for 15.8 percent of all workers (an increase from 10.1 percent in 2005). This includes temporary help agency workers, on-call workers, contract workers, and independent contractors. Much of the coverage on this topic has focused on worker rights and protections in context of current labor laws. Less studied, however, are the consequences for firm structure, formation, and growth potential.
The Kauffman Foundation is soliciting grant proposals to better understand how technology and other factors are changing the nature of work and the subsequent effect on firm size, structure, and creation. Traditional data and economic language is becoming less accurate for analysis of economic activity as work changes. Questions of particular interest, although we are open to other suggestions, include:
• Does the growth of alternative work arrangements increase existing firm size and create an anti-competitive environment for startups?
• What are similarities and differences of the future of work for traditional employer-employee work arrangements?
• What are the socioeconomic implications (poverty, economic and geographic mobility, housing, transportation, job stability, cost of living, and more) of the changing nature of work?
• How does the growth of alternative work arrangements affect the risks and rewards of entrepreneurship?
• What are the connections with the growth of alternative work arrangements and worker productivity?
• How can we use current data sets to better understand the implications of the changing nature of work on entrepreneurship?
• What modifications or additions are needed to traditional economic analysis and data collection to better account for alternative work arrangements?
• What are the implications on entrepreneurship of potential policy changes in the labor market to address alternative work?
• How should policy be constructed to address concerns of worker protections without compromising on the benefits of alternative work?
Grants will be made to research institutions and universities; the Foundation will not fund individuals directly. Funding is restricted to institutions located within the United States. Research teams may be comprised of individuals not based in the U.S., but a U.S. institution must be the grant recipient. We will not fund indirect costs.
Those interested in submitting a proposal must complete the online preliminary application. No other documentation or proposals submitted outside this form will be considered. Questions can be directed to Derek Ozkal.
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Derek Ozkal is a program officer in Research and Policy for the Ewing Marion Kauffman Foundation, where he assists with writing and analysis of various Research & Policy initiatives and administers grants, which includes managing and overseeing assigned grant portfolios, monitoring grantee performance, and reviewing grant proposals.