A report from the Brookings Institute seems to point to evidence that suggest a near universal decline in entrepreneurship and business dynamism across the last 30 years and involving all fifty states and all but 360 metropolitan areas.
The reports authors do not go as far as to say why these trends are happening or offer any solutions but they do acknowledge that these trends are part of a larger story where older and larger enterprises are doing better compared to younger and smaller ones.
In addition, fewer people are launching new firms, and workers are switching jobs less. Given that the data is about 3 years old some of these trends may have reversed their negativity by now or stabilized.
The author’s believe that the government needs to adopt policies that encourage more entrepreneurship such as increasing the number of work visas granted to immigrant entrepreneurs. In addition, the government could offer more favorable opportunities for foreign graduates of US schools in the so-called STEM fields (science, technology, engineering and math) to remain in the United States to work for other enterprises.
The historical pattern shows that immigrants are twice as likely to launch businesses as native-born Americans.
According to the conclusion of the report:
At the state and local level, governments, educational institutions, entrepreneurs, investors and foundations should
continue to experiment with ways to encourage new business formation. The increasing popularity of “business accelerators” throughout the country is a welcome development that should be
nurtured.
So, maybe this is as good a time as any to be an entrepreneur because the worst may have come to pass. Or so the data says. We won’t know for another 3 years.
