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Study: Is American Entrepreneurship Growing “Less Dynamic Than Ever?”

Americans like to believe the U.S. private sector is a hotbed of entrepreneurial activity, experimentation and innovation. But is it so? A pair of economists are challenging that belief with new research revealing that the nation’s entrepreneurial economy has grown “less dynamic than ever” in recent decades.

That’s the conclusion Ian Hathaway of Ennsyte Economics and Robert Litan of The Brookings Institution draw in their recent study, “The Other Aging of America: The Increasing Dominance of Older Firms.” The authors suggest U.S. economic activity is growing more reliant upon older firms, rather than newer, younger entrants to the market. And that trend may have serious implications for job creation, competitiveness and the long-term health of the economy.

“Whatever the cause, it is increasingly advantageous to be an incumbent, particularly an older one, and apparently more difficult to be a new entrant,” Hathaway and Litan write. “We document these trends across a broad range of industrial sectors, firm sizes and regions throughout the United States.”

Read full article here from US Chamber of Commerce


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