Entrepreneurship in the twenty-first century

Abstract

Employer business startups contribute disproportionately to job creation, innovation, and productivity growth. This contribution is dynamic and complex involving much trial and error. Most startups fail or do not grow but a small fraction grow rapidly contributing substantially to economic performance. In the USA, there has been a decline in startup rate and the share of activity accounted for by young firms over the last couple of decades. This decline has accelerated and become pervasive in the post-2000 period even in innovative-intensive sectors. The flip side of this change is an accompanying increase in the share of activity accounted for by mega (10,000 +) firms in the post-2000 period. While both benign and adverse factors may underlie these structural changes, the post-2000 period has also exhibited a decline in productivity growth along with indicators of business dynamism. The global pandemic has had a major adverse impact on health, morbidity, daily life, and economic activity. However, there has been a surge in new business applications that may signal a turning point in entrepreneurial activity.