The Mysterious Death of Entrepreneurship in America

[octoberlib]

The story of American entrepreneurship begins with a tale of two definitions of entrepreneur. When the press imagines the modern entrepreneur, our minds turn to tech—coders, hackers, hoodies, apps, Silicon Valley (the show), Silicon Valley (the valley). And it's true: This sliver of entrepreneurship has grown, by all sorts of measures, for example by venture-capital funding:



But researchers studying national entrepreneurship trends aren't caught staring at the tip of the iceberg. When they describe "declining business dynamism" (at Brookings) and steadily falling entrepreneurship (at BLS), they're looking at the whole block of ice. And it's melting.

What's melting, exactly? Not the kids' apps, but the mom-and-pop stores. Derek's Coffee and Thompson's Corner Store would be considered start-ups. But a new Starbucks or Whole Foods is considered part of an existing franchise. So as chains have expanded by more than 50 percent since 1983—Walmart gobbles up smaller competition with a particularly greedy appetite—start-ups have perished, as Jordan Weissmann has explained. The demise of small new companies isn't limited to retail. Construction and manufacturing start-ups have collapsed by more than 60 percent in the last four decades.

One good reason to care about start-ups in America is that they tend to start ... in ... America. Going back to the late 1970s, as globalization started to accelerate, the majority of net job creation has come from new companies, rather than old firms, which are often expanding abroad. The vast majority of job creation at big multinational corporations—as much as 75 percent of new jobs—happens overseas, since other countries are growing considerably faster than our 2-percent rate.


http://www.theatlantic.com/business/archive/2014/05/entrepreneurship-in-america-is-dying-wait-what-does-that-actually-mean/362097/

[Hestia]

1. If you look at the true definition of "entrepreneur" - it's basic meaning is a Hit Man

Excessive risk

[MisterP]

2. 's how it always works: we say "We're #1!" only when we're not, and BECAUSE we're not

stories of Canadians fleeing to Detroit for healthcare, of Mississippi's low, low, low teen-pregnancy rate, of Reagan fighting terrorism, of north Louisiana singlehandedly upholding both feckless CA and broken-down Commie NY--those are all perfect 180s from reality, a fact demanded (not just encouraged) by our political culture

[Snarkoleptic]

3. It's time to begin enforcing the Sherman AntiTrust Act.

These corporate giants are killing innovation and I hear new M&A stories on a weekly basis.
Recent examples are-
Comcast - AOL Time Warner
AT&T - Dish Network

Plus many of these giants spend more lobbying than they pay in federal taxes.
The corporatocracy is swallowing the heart and soul of our democracy.

[octoberlib]

4. Thanks for the chart! They probably pay their lobbying fees with

their taxpayer subsidies. Our system of government is screwed up.

[seabeckind]

6. Some serious questions to address...

How many of the above firms were startups, at least in the last couple decade?

How many of the above firms started out as public utilities which were gobbled up by vampire investors?

Where are the banks? Or does installing a banker in the executive branch not count as lobbying?

[Doctor_J]

5. Anti-trust laws and UHC - problem solved

[seabeckind]

7. Reagan did an EO that

effectively killed anti-trust enforcement.

The SCOTUS took care of the rest. Eg, the decision that allowed banks to choose which state's regulations to follow.

[Fumesucker]

8. It doesn't seem all that mysterious to me

Large established companies love stringent regulations

It helps keeps the startup riffraff from competing with them on a heads-up basis.