Research

Entrepreneurs Are Being Left Behind In Obama’s Economy

As Obama Touts Entrepreneurship In Pittsburgh, Innovators And Entrepreneurs Continue To Struggle In The Obama Economy

Pittsburgh Post-Gazette Headline: “Obama To Tout Entrepreneurship During Pittsburgh Visit Today.” (Tracie Mauriello, “Obama To Tout Entrepreneurship During Pittsburgh Visit Today,” Pittsburgh Post-Gazette, 6/17/14)

Obama Plans To Announce An Initiative To Expand Access To Federal And Local Facilities To Entrepreneurs. “Inability to afford expensive equipment will be less of a barrier to invention under President Barack Obama’s plan to spur innovation by opening federal and local facilities to entrepreneurs. The president is expected to announce the initiative this afternoon during a visit to Bakery Square’s TechShop, a membership-based manufacturing workshop that’s a model for the kind of sharing of resources he wants to see more of.” (Tracie Mauriello, “Obama To Tout Entrepreneurship During Pittsburgh Visit Today,” Pittsburgh Post-Gazette, 6/17/14)

While Obama Tries To Talk About Entrepreneurship, Actual Entrepreneurs Are Suffering In His Economy

According To The Kauffman Index Of Entrepreneurial Activity, Entrepreneurial Activity Has Declined Every Year But One Since Obama Has Been President. (Robert W. Fairlie, “Kauffman Index Of Entrepreneurial Activity 1996-2013,” The Kauffman Foundation, 4/14)

In 2013 There Were 38,000 Fewer New Business Owners Per Month Compared To 2012. “That translates into approximately 476,000 new business owners per month in 2013 compared with 514,000 the year before.” (Dane Stangler, “Entrepreneurial Activity Declines Again in 2013 as Labor Market Strengthens, according to Kauffman Report,” Kauffman Foundation, 4/9/14)

According To The Latest Study From The Brookings Institute, The American Economy Is Less Entrepreneurial Than At Any Point In The Last Three Decades. “The American economy is less entrepreneurial now than at any point in the last three decades. That’s the conclusion of a new study out from the Brookings Institution, which looks at the rates of new business creation and destruction since 1978.” (Christopher Ingraham, “U.S. Businesses Are Being Destroyed Faster Than They’re Being Created,” The Washington Post, 5/5/2014)

  • In 2009, 2010, And 2011, Businesses Collapsed Faster Than They Were Being Formed. “Not only that, but during the most recent three years of the study — 2009, 2010 and 2011 — businesses were collapsing faster than they were being formed, a first. Overall, new businesses creation (measured as the share of all businesses less than one year old) declined by about half from 1978 to 2011.” (Christopher Ingraham, “U.S. Businesses Are Being Destroyed Faster Than They’re Being Created,” The Washington Post, 5/5/2014)

The Decline in Entrepreneurship Points To Less Dynamism, Which Is “Critical To Long-Run Economic Growth.” “And they play a vital role in promoting innovation and productivity gains across the economy. In a recent report from the Brookings Institution, Ian Hathaway and Robert Litan wrote that the decline in entrepreneurship ‘points to a U.S. economy that has steadily become less dynamic over time… Business dynamism is inherently disruptive,’ they wrote, ‘but it is also critical to long-run economic growth.’” (Ben Casselman, “The Slow Death of American Entrepreneurship,” FiveThirtyEight, 5/15/14)

The Decline In Entrepreneurship Is Across “Every Major Industrial Sector, Every State And Nearly Every Large City.” “For one thing, the decline in entrepreneurship is remarkably broad-based, not isolated to the industries such as retail where big corporations have edged out family businesses. According to the Brookings paper, every major industrial sector, every state and nearly every large city has a lower startup rate today than it did three decades ago.” (Ben Casselman, “The Slow Death of American Entrepreneurship,” FiveThirtyEight, 5/15/14)

  • Business Dynamism Has Declined In All Fifty States And Nearly All Metropolitan Areas. “In fact, we show that dynamism has declined in all fifty states and in all but a handful of the more than three hundred and sixty U.S. metropolitan areas during the last three decades.” (Ian Hathaway and Robert E. Litan, “Declining Business Dynamism In The United States: A Look At States And Metros,” The Brookings Institution, 5/14)

“Increasing Licensure Requirements” And “High Corporate Tax Rates” Contribute To “Broader Decline In Innovation And Productivity Growth.” “The U.S. economy is also increasingly dominated by large corporations, suggesting deeper structural changes working against small companies. People have pointed to other explanations, from increasing licensure requirements in many industries to high corporate tax rates to a broader decline in innovation and productivity growth.” (Ben Casselman, “The Slow Death of American Entrepreneurship,” FiveThirtyEight, 5/15/14)

Four Years After Obama’s Supposed “Recovery Summer,” Large Numbers Of Small Business Owners Are Dreading The Future

According To One Survey, One-Third Of Small Business Owners Believe Economy Is Still In A Recession. “U.S. Economic Outlook For 2014: 34% Say Economy Is Still In A Recession, 52% Say Economy In Recovery, And 4% Think Economy Is In Expansion. In 2013, 43% Said Economy Was Still In A Recession, 45% Said Economy Was In Recovery, And 1% Said Economy Was In Expansion.” (“2014 U.S. Bank Small Business Annual Survey,” U.S. Bank, p.5, 4/24/14)

One In Four Small Business Owners Predict Further Recession In 2015. “Asked About Future Economic Outlook For 2015, 26% Predict Recession, 41% Predict Recovery, 16% Predict Expansion, And 17% Unsure.” (“2014 U.S. Bank Small Business Annual Survey,” U.S. Bank, p.5, 4/24/14)

“Higher Taxes And Unemployment Are Top Drivers Of Negative Sentiment.” (“2014 U.S. Bank Small Business Annual Survey,” U.S. Bank, p.5, 4/24/14)