America Less Entrepreneurial, Employment Impacts

America Is Getting Less Entrepreneurial -- NYMag: Robert A. Litan of the Brookings Institution and Ian Hathaway of Ennsyte Economics provide some scary data points in two research papers they have released in the last few months.

• The share of all companies comprised by start-ups under a year old fell by half between 1978 and 2011
• The proportion of private-sector workers employed at older firms has increased from 60 percent to 72 percent since 1992
• The proportion of workers employed at young firms has declined over the same period
• Companies under a year old are failing more often, with the “failure rate” for start-ups climbing to 27 percent from 16 percent in the early 1990s
• The “failure rate” has increased for all but the longest-established businesses

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Employment or Entrepreneurship? Which pays more

Does It Pay to Become an Entrepreneur? - Forbes: ". . . Who in his right mind would forsake a well-earned and almost guaranteed path to success and comfort, to take on a mission where “they” don’t care how impressive your performance reviews at your last job were, where you went to school, or how you just missed a perfect SAT score? In fact, there is no “they” ― there’s just you, trying to create something from nothing. . . . the study found that the mean, median, and standard deviation of incomes for entrepreneurs ― controlled for education, general ability (as measured by standardized test scores), and demographics (including age and parental income) ― tended to be higher than those for good old-fashioned employees. And the difference is by no means small: mean income for entrepreneurs is almost 50% greater than for “employees.” And what’s more, this effect is not explained by “professional” entrepreneurial pursuits such as opening a medical or law practice. . . ."


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