Raw Data: America Is Still Producing Lots of Inventive Young Companies


Here’s a quick follow-up to my post last week about the decline in new business startups over the past few decades. Does this suggest that America is getting less entrepreneurial? In one way, yes: some of it is probably due to big national chains making it harder to start small family businesses, and some of it is probably due to an aging population. Economically, however, the triumph of gigantic chain stores isn’t necessarily a bad thing, and the aging of the baby boomers should be thought of as a separate demographic issue, not a business startup issue.

Still, economists all agree that the key to a healthy economy is young, growing companies (not small businesses pe se). So how are we doing on that score? 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.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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