Some Snapshots And Thoughts About US Entrepreneurship

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In thinking about US entrepreneurship, the standard concern is that the churning of the job market seems to be declining over time. The orange line shows that job creation by new establishments has been declining, too, similar to the finding from the Kauffman data. 

A dynamic churning economy is a mixture of benefits for firms and their workers on the rise and costs for firms and their workers who are on the downside. But from an overall perspective, it also represents a shift in resources away from firms producing goods and services that not enough people want to buy or goods and service that aren't being produced at a competitive level of price and quality. Instead, those resources of workers and capital investment are moving to firms producing the goods and services with the desired mix of price and quality that people do want to purchase. I have argued from time to time that the government could play a larger role in facilitating, or at least not blocking, this process of dynamic movement--especially by assisting workers in transition. But overall, this dynamic process of economic reallocation has been one of the strengths of the US economy, and it is troublesome to see signs that it may be diminishing. 

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