May 23, 2014

Business startups hit a 30-year low point

Where has America’s entrepreneurial mojo gone?

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

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.

Related content



Editor's Choice Videos