The U.S. economy is inching along, productivity is flagging and millions of Americans appear locked out of the labor market.
One key factor intertwined with this loss of dynamism: The U.S. is creating startup businesses at historically low rates.
The American economy has long relied on fast-growing young companies to fuel job growth and spread the latest innovations. As recently as the 1980s and 1990s, a small number of young firms disproportionately contributed to U.S. employment growth, helping allocate workers and resources to burgeoning segments of the economy.
But government data shows a decadeslong slowdown in entrepreneurship. The share of private firms less than a year old has dropped from more than 12% during much of the 1980s to only about 8% since 2010. In 2014, the most recent year of data, the startup rate was the second-lowest on record, after 2010, according to Census Bureau figures released last month, so there’s little sign of a postrecession rebound.
Chosen excerpts by Job Market Monitor. Read the whole story at Sputtering Startups Weigh on U.S. Economic Growth – WSJ