Presidential candidates should discuss how they will support entrepreneurship
There are more than 3,000 counties in the United States, yet only 20 of them managed to combine for half of America’s net new business formation in the first five years of this economic recovery, according to a new analysis of Census data by the Economic Innovation Group in Washington, DC. Those 20 counties include parts of Silicon Valley, Southern California, and the greater New York City area which are top venture capital destinations.
The findings capture an economy veering towards a less broadly dynamic, less entrepreneurial, and more geographically concentrated equilibrium.
New business establishments consolidated into the country’s largest markets over the 2010s to an extent not seen during prior recoveries. In the 1990s, counties with under 500,000 people generated 71 percent of all new business establishments — a total of nearly 300,000.
By the 2010s, counties with over 500,000 people had become dominant, generating 81 percent of all new business establishments — despite housing only 47 percent of the country’s population. Were it not for these relatively few pockets of resiliency, the U.S. economy would have seen near-total stagnation in its business landscape.
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The New Map of Economic Growth and Recovery report identifies the geography and strength of job creation and new business formation, as well the overall collapse in the number of new firms in the economy.
SOURCE: Economic Innovation Group, US Federal Reserve