America Has a Serious Start-Up Slump: Discouraging news about American entrepreneurship.

RCM ^ | 12/18/2015 | Robert Samuelson

[SeekAndFind]

We confidently assume that we have the world's most entrepreneurial nation, and the proof seems overwhelming. Google, Facebook and Twitter are but three (relatively) recent startups that have become corporate titans.

Before them, there were others: Microsoft, Intel and FedEx. We seem to excel at nurturing new firms. Or do we?

Previous studies have shown that, despite the success of firms like Facebook, the number of startups has dropped sharply, from about 13% of all firms in the late 1980s to about 8% in 2011.

Now a new study from the National Bureau of Economic Research reports that the expansion of the remaining startups - which traditionally has been much faster than the growth of existing companies - has slowed considerably.

By some measures, it now barely exceeds the average of older companies.

So there's a double whammy: fewer startups and slower growth at the survivors.

This could be one reason the recovery from the Great Recession has been so sluggish, with the economy's growth averaging about 2% annually from 2010 to 2014, much slower than earlier post-World War II recoveries.

Using Census Bureau data, the study examined business births (the creation of new firms), deaths (companies going out of business) and growth from 1976 to 2011. It confirmed earlier studies: Though most new firms fail in their first five years, the growth of the survivors is so strong that it offsets the losses of other firms and creates much of the economy's overall increase in jobs. But that began to change after 2000, when startups' high growth faded.

The upshot: "Startups and high-growth young firms (under five years) contributed less to U.S. job creation in the post-2000 period than in earlier periods," said the report.

The startup slump may also help explain the slowdown in productivity

[trisham]

Sorry. I meant that stolen (fallen off the back of a truck) items may be fraudulently purchased with cash.

[neefer]

Weird. I was recently up there and visited a Cambodian restaurant we frequented. I noticed they no longer accept debt/credit cards. I’m waiting for the Feds to outlaw cash.

[Buckeye McFrog]

Crony Capitalism has triumphed. Big Business has managed to buy enough regulation in Washington to keep Small Business from bothering them.

[neefer]

In most states. California and Colorado growers are making a bundle by mailing it to out of state consumers. I had a professional interior plant care job before my husband landed a very good paying job in W.V. More than one of his co-workers (in the medical field) suggested I try growing. It’s a way of life down here. The local law enforcement over look it (unless you’re growing hundreds of plants) because they know growers eventually buy a four-wheeler, truck, or something that they can tax.

[tbw2]

Here in Texas, a number of businesses have started accepting pesos.

Whether this is part of an effort to launder money or cater to Mexicans, I’m not sure.

But if they outlaw dollars, you’ll see more pesos used. For those up north, Canadian currency.

[stephenjohnbanker]

“Crony Capitalism has triumphed. Big Business has managed to buy enough regulation in Washington to keep Small Business from bothering them.”

Two of the biggest cc’s are Obama & Hillary. Not conjecture, just concrete fact.

[5thGenTexan]

It's not good when government creates a situation where the only possible approach in order to succeed is to break the law.

Not saying you believe it, but this is the exact excuse I hear about illegal aliens. The government has made it soooo hard to enter legally, they must break the law in order to make a better life for their families.

[grania]

The invaders wouldn't benefit from being here if employers were held accountable for hiring US citizens.....or face serious fines and/or jail time. EVerify for everything, and the invaders wouldn't get freebies.

Then they wouldn't be able to benefit from coming to the US illegally.

[Mr. Jeeves]

As a small business owner, my #1 problem in the Obama economy is discouraged consumers. People are scared to spend. When they do, they prefer cheap and barely functional items over more expensive quality items. Since most small retailers can't do the volume needed to survive selling low-priced products they are fading out of existence - and rather than benefiting much from this trend, Walmart and the dollar stores are just treading water.

The aspirational middle class of 2005 or so has virtually disappeared. The top 10% are still spending, but there is a lot of competition for their dollars.

[5thGenTexan]

Oh, I agree. And I don’t think you support illegal immigration. We Conservatives just need to help each other on messaging and I wanted to point out that way of saying it could be a trap or sorts.

[Organic Panic]

As a small manufacturer I can confirm the current climate is terrible. Every time you turn around there is someone from government with their hand out.

The best is to get a home shop and keep it all on the down low. Pay your taxes but don’t let the city, county, state, or feds know anything more than absolutely needed. When asked always say “consulting.”

[wally_bert]

Thank you.

I got it in my YT history for later.