In our previous post, we discussed a study suggesting there was a decline in entrepreneurial activity in recent years in the US. You may remember that blogger Kevin Drum had some doubts about the study. Well, he followed it up with a little checking and now makes the case that the situation hasn’t changed at all:
Over at Slate, Jordan Weissman points to a study by Paul Kedrosky that tries to quantify the number of startups that grow to $100 million or more in a fairly short period. The chart on the right shows his results. There’s a spike during the dotcom boom of the late 90s, and a dropoff during the Great Recession—a period too recent to have yet produced very many $100 million companies anyway—but there’s basically no secular decline at all. Roughly speaking, America has been producing about 150 small, fast-growing companies per year for the past three decades.
This is just a single data point, and Kedrosky warns that his data is necessarily pretty rough. But it does suggest that although America might be producing fewer new coffee shops and boutique clothing stores, it’s not necessarily losing its inventive edge.
Mr. Drum’s full post is here.
We report. You decide.