Entrepreneurship has been in decline for 40 years... so is now the best time to launch your business?
The United States has long been the natural home of the entrepreneur but recent reports suggest that Americans are less likely to start a company now than in the past four decades. So what has led to this worrying decline in home grown entrepreneurship? And does this low point offer an ideal opportunity to launch your start-up?
Fear of Failure
The main reason for this lack of entrepreneurial spirit is down to one thing - fear of failure. Unsurprisingly, much of this recent trepidation is a legacy effect from the Stock Market crash of 2008. The truth is that confidence hasn't really recovered since then. Although U.S based entrepreneurial business launches have been in steady decline for several decades, the catalyst of the last major financial crisis has proven pivotal.
The U.S census data speaks for itself: in 1977 there were just under 600,000 start-up businesses launched in that year. Between then, and prior to the Stock Market meltdown in 2008, the number of entrepreneurial launches fluctuated between 500,000-600,000. However, since the crash the number of launches has hovered at a much lower rate, between 400,000-450,000 per annum.
This generational loss of enterprise is having a detrimental effect on the launch of start-ups which is still being felt today, despite a steadily improving economy. The net effect of this is that the more traditional firms, which by their very nature tend to be less dynamic, now employ an increasing proportion of the workforce.
In fact, between 1993-2013, the share of companies who had been in business for over 16 years that were actually driving the economy increased 12 percent and the share of the workforce employed by such firms increased from 62 percent to 73 percent. The result is that that employees are less likely to leave what they deem to be a safe job, they are less prepared