One of the issues of this era which does not get the level of discussion deserved is the decline of entrepreneurship and business formation in the United States over the past 30 years.
Many people have written a lot about his issue and tried to come up with reasons which explain this trend. Explanation’s given include insufficient access to capital, skills shortages, taxing and regulatory policies, an aversion for risk among Americas young and economic uncertainty.
In many ways the issue insufficient access to capital overlaps with issues to do with the tax code. As things stand, America has a very complex tax code which inhibits growth through its penalization of savings, investment, and productive activity. More actions in the direction of maxing the tax code simpler and not punishing savings, investment and productive activity would go a long way towards rectifying this issue.
Today in America over 1 million jobs in the IT sector which don’t require college degrees are left open. These are well-paying jobs. With the rise of online coding courses for free and other online based certifications which are related to the IT sector, this could help in filling this shortage. But in the first instance, people need to be made aware of such opening and what they can do go gain the necessary skills to fill such positions.
Probably the biggest issue choking entrepreneurship and business formation is regulation. Many have an image of regulation being put in place for benevolent and high-spirited reasons meant to help the public. But in many cases, industry players lobby for regulations in order to maintain their market position and hamper newer entrants with innovations which might threaten their position.
In a growing and dynamic economy, it’s usually smaller, newer, and agile firms which contribute to net job creation and are the most innovation. If greater dynamism is to return to our economy, regulatory reform has to take place, even if it means it hill force individual firms to go through painful restructuring in the short run as they face greater completion and their operations are directed more by market forces.
Behind the decline in entrepreneurship in the United States, is a decline in attitudes and incentives towards entrepreneurship and a culture which promotes it. With such attitude, some of the ideas and solutions discussed above would be difficult to implement. More needs to be done to show the population the social good of business and why it’s a force for bettering society. The youth of the United States, who are the ones meant to have the energy and imagination, need to be encouraged to take
The youth of the United States, who are the ones meant to have the energy and imagination to maintain a flourish environment for entrepreneurship, need to be encouraged to take calculated risks when still relatively young. We also need more of a culture which tolerates failure and shows that failure in many cases is a route towards learning. The reality is that in the business world, failure is many ways is a must because it’s through failure we know which firms are doing the most efficient jobs and to whom resources should be either directed or taken away.