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“Let’s get one thing clear: The economy is never truly coming back…”
Unless, says Jim Clifton, CEO of Gallup, we reverse the life cycle trends of American business. The company’s recent research shows entrepreneurship is declining for the first time since the government began measuring it over 35 years ago.
Since 2008, about 400,000 new businesses are born every year… but 470,000 businesses die. The U.S. has fallen to 12th worldwide in terms of business startup activities. Former communist bastions like like Hungary and Finland now have higher startup rates than the U.S.
The report says, of the 26 million reported “businesses” in the U.S., 20 million of these have no sales, profits, customers, or employees. And of the 6 million operational businesses, only 3.8 million are the classic “mom and pop” (employing between one and four people). These businesses used to blanket the states from coast to coast. They provided the foundation of a wide tax base and jobs for 100 million people.
They’re the root of U.S. power and prosperity… and right now they are in terminal decline.
Don’t expect to hear about the death of entrepreneurship in the news. Both Washington and Wall Street need you to believe the economy is coming back. They’ll focus on indicators like a booming stock market to show America’s business environment has improved. This keeps the current power structure entrenched.
But until the U.S. business life cycle returns positive, America’s economic foundation will remain endangered… and with it, American prosperity.
To examine the full Gallup data, for free, click here.