THE ECONOMY

Business startups hit a 30-year low point

The Kansas City StarMay 23, 2014 

Where has America’s entrepreneurial mojo gone?

Startups of new businesses, which are historically the key source of new jobs, are at their lowest point in 30 years. They’re occurring so sparingly that U.S. businesses are now dying faster than they’re being born.

The news is “shockingly bad” and “starting to look like a death spiral,” political blogger and small business advocate Jean Card said on U.S. News’ Thomas Jefferson Street Blog.

It “runs totally counter to the narrative” of America’s entrepreneurial embrace with TV shows like “Shark Tank,” added Ben Casselman, chief economics writer for FiveThirtyEight.com.

The trend, dissected in recent reports from the Brookings Institution in Washington and the Kauffman Foundation in Kansas City, sounds alarms about the economy.

“It’s a real worry,” said Robert Litan, a former Kauffman economist now at Brookings.

He co-authored the Brookings report that found the decline in new business formation spreads across all states, nearly all metropolitan areas and each sector of the economy.

Economists aren’t especially worried about business failures. These are no more common than usual.

They’re more concerned about what has been a 30-year steady slide in business startups.

Over that time, the pace of startups has been cut nearly in half, according to Brookings, with a “precipitous drop” beginning in 2006.

The State is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service