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American Entrepreneurship Declining

Number of New Entrepreneurs Has Dropped by More Than 50 Percent Over Last Generation
Published:   July 10, 2012

Washington, D.C. - America's entrepreneurial activity has, by many measures, sharply declined over the last generation, according to a study released today by the New America Foundation's Markets, Enterprise, and Resiliency Initiative.

The study found the number of new entrepreneurs, measured per capita, has been dropping for a generation - by 53 percent between 1977 and 2010. In addition, the share of self-employed Americans decreased by more than 20 percent between 1991 and 2010.

The fact that America's entrepreneurial sector is in a deep crisis may surprise many, as the mainstream media continues to promote the idea that the nation's small and upstart businesses are either generally thriving or recovering from the sudden blow of the Great Recession. A closer look at the data reveals the exact opposite to be true, with a long-standing decline in the numbers of independent start-ups per working-age American.

The study closely examines census data, and shows the crisis may be far worse than government data reveal due to a systematic failure to define carefully what sort of businesses should be counted as truly "independent."

This decline in entrepreneurship means fewer opportunities for families to build assets. It means fewer firms hiring new employees and competing to keep existing workers. It means fewer independent voices - fewer Joe the Plumbers - in the town hall debate. It means greater concentration of economic and political power.

To read the full report, Out of Business: Measuring the Decline of American Entrepreneurship, click here. To interview the report's authors, Barry C. Lynn and Lina Khan, please contact Clara Hogan. 

An article in the Washington Monthly about the report is available here.

About The Markets, Enterprise, and Resiliency Initiative
The Markets, Enterprise, and Resiliency Initiative promotes political, industrial, economic, and environmental resilience. It does so documenting and clarifying the dangers of extreme economic consolidation, and by promoting the virtues of open and competitive markets.

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