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Business Dynamism in High Tech (Blog Post) (view source)
Revision as of 16:41, 9 June 2016
, 16:41, 9 June 2016→Blog Post
The American perception of entrepreneurship and innovation is an overwhelmingly positive one; Americans believe not only that there are good opportunities for starting a business, but also, as according to Forbes, that they have the [http://www.forbes.com/sites/elainepofeldt/2013/05/27/u-s-entrepreneurship-hits-record-high/#7144d97d73aa capabilities] to start one themselves. The Global Entrepreneurship Monitor U.S. [http://www.babson.edu/news-events/babson-news/PublishingImages/babson-gem-info-graphic-692.png report] found that 43% of Americans believe there are good opportunities for entrepreneurship, and that 56% of American adults believe they have the capability to start a business. Recent trends in business birth and death rates however tell a more sinister story.
A [http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2014/02/declining_business_dynamism_in_us_high_tech_sector.pdf%20Kauffman study]from the Kauffman Foundation reported sustained declines in entrepreneurship and business dynamism across the U.S. economy. Though the Wall Street Journal and many Americans [http://blogs.wsj.com/washwire/2014/05/06/snowden-effect-americans-still-like-tech-industry-but-not-telecom/ still view] the high-tech sector as the pinnacle of entrepreneurship and innovation, the Kauffman Foundation [http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2014/02/declining_business_dynamism_in_us_high_tech_sector.pdf%20Kauffman found] the decline in business dynamism that occurred broadly across the U.S. economy over the past two decades also dragged on the high-tech sector in the post-2000 period. The high-tech sector, or the group of industries with very high shares of workers in the STEM occupations of science, technology, engineering, and math has been found to be in decline, which begs the question: what happened in the American economy to cause the decline of business dynamism in high technology sectors?
During the period of aggregate productivity and job growth in the 1990s, the high tech sector and newly listed public companies exhibited increases in indicators in dynamism and entrepreneurship. However, since 2000, the National Bureau of Economic Research has [http://econweb.umd.edu/~haltiwan/Haltiwanger_Kauffman_Conference_August_1_2015.pdf observed] the high tech sector and publicly traded firms exhibiting a decline in dynamism. The number of IPOs has fallen in the post-2000 period and those that have entered have not exhibited the same rapid growth as earlier cohorts.
