Some Snapshots And Thoughts About US Entrepreneurship

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In addition: "Older adults also represent a growing segment of the entrepreneurial population: adults between the ages of 55 and 64 made up 26 percent of new entrepreneurs in 2017, a significant increase over the 19.1 percent they represented in 2007." Conversely, these figures suggest that a smaller share of new companies are being started by highly educated workers in their peak earning years. 

At least to me, this pattern suggests the possibility that a larger share of new companies are aimed at providing income and independence for their owners, but may be less likely to grow and generate substantial numbers of jobs. Indeed, the Kauffman report also includes this figure, showing that the jobs per 1,000 people from early startups has been declining over time. 

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The Business Dynamics Statistics is constructed from what is called the Longitudinal Business Database. In turn, this data uses Census data and links the records on individual companies over time. To keep the records of individual companies confidential, the data can only be accessed by qualified researchers through a network of Census Bureau Research Data Centers. However, the website does have a nice data tool for making quick-and-easy graphs of some overall patterns in this data, as well as sector-level and state-level patterns. 

Here's an example of a figure showing "Establishment birth rates" (black line) and "Establishment exit rate" (blue line). For example, back in the 1980s, it was fairly common for the number of new establishments to be about 15 percent of the total number of firms; now, it's about 10%. Both rates of entry and exit have been declining over time, suggesting that new firms are having a harder time getting started and established firms are having an easier time staying in place. 

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As another example, here a figure for the economy as a whole from the BDS database on the "job creation rate" (black line), "job destruction rate" (blue line), and "job creation rate from establishment births" (orange line). The gap between the job creation rate and the job destruction rate is the overall level of net new jobs for the economy in a year. Fortunately, job creation is above job destruction in most years, except in recessions. But even in years when the US economy is going well, its churning, changing, the evolving job market is commonly in a situation where the 13-15% of existing jobs are destroyed, and a slightly higher share of new jobs are being created. 

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