Fast Take: Fewer Businesses are Being Created

The number of new companies being started in the U.S. has slowly been declining over the past four decades. Compared to today, twice as many businesses were being created in the late 1970’s and early 1980’s.  In fact, for the first time in over 40 years, from 2009 to 2011, more companies were shut down than started.

These stats were part of a report conducted by the Economic Innovation Group, which is an economic think-tank in Washington D.C.

Many of us in the startup ecosystem live in high growth, tech-focused regions like Silicon Valley, L.A.. New York and others, and we lose sight of the fact that the majority of the nation has not recovered from the Great Recession of 2008 and 2009.  

So what does this all mean?  As a nation we are not starting enough companies and our entrepreneurial drive as well as the engine that fuels new growth and job creation in our economy is slowing.  With less competition, big companies will continue to get bigger, creating higher barriers to entry and challenges for startups that are looking to compete.

So what do we do? First, we need to create awareness and determine why this is happening.  I have a lot of suggestions regarding this but I will save that for a future post.  What I do know though is that we need to start creating more companies and as an accelerator and investor, Founders Floor is here to help people do that.  So if you are a startup feel free to reach out to us.