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There’s mild panic in entrepreneurship promotion circles over the declining rate of business startups in the U.S. The worry is understandable, the causes complex. The lone entrepreneur, toiling at first in a garage or basement, only to emerge from modest confines to create the next Apple or Facebook is an important character in national mythology. Woe be to true believers if our heroic figures can’t escape their, or their parents, dwelling places.
For policy types promoting exports, the worry is that fewer business startups will adversely affect the goal of increasing outbound goods and services. In the last decade, the number of SME exporters has doubled to 300,000. This number is less than two percent of all businesses in the U.S. Another doubling by 2022 is possible but not guaranteed. Fewer startups may equal fewer exporters, or so the thinking goes. Also worrisome is a related problem: Fewer startups mean less job creation. In fact, the type of startup that has increased is the sole proprietorship. Not many new jobs there, and a reflection of a cautious view of the domestic economy.
One reason for the drop in startups is certainly the Great Recession that started in 2008 and whose effects are still being felt. But a study by the Kauffman Foundation, relying heavily on U.S. Bureau of the Census data, indicates that the slowing began in the1980’s.
Some of the startups during the recession were a consequence of not being able to find work in someone else’s company. They are the so-called necessity based startups as distinct from entrepreneurs who spot an opportunity and create a business to exploit it. Most necessity-based startups may not be good candidates for exporting. Now that the domestic economy is improving necessity based entrepreneurs may abandon their plans to start a business, or the business that they recently started, to work for someone else. Sum the startup leavers with those hesitant to start because of the less-than-ideal post recession business climate and you have a plausible explanation why startups are down.
There may be fewer startups than 20 years ago but the current crop may be more likely to be successful because they survive a Darwinian business environment that features slack demand, miserly credit markets, and rapacious regulations. We don't know if the quality versus quantity argument is persuasive because the available studies didn't study that.
Down but not unhappy
What we do know is that the existing startups are a positive lot. According to one study, 84 percent of startups surveyed in 2012 said they were confident or highly confident of success in 2013—a one percent gain over the previous year.
We also know that immigrants to the U.S. are twice as likely to start a business than native-born people, and that immigrant-owned businesses are several times as likely to export as non-immigrant owned businesses. Want to generate more startups that export? Pass immigration reform legislation, especially the part that makes it easier for STEM doctoral graduates from U.S. universities to stay in the U.S. High tech startups in 2011 were up 69 percent over 1980. But back then social media was the telephone, with party lines for the hyper social.
Indeed, college grads start the most businesses of all kinds followed by high school grads, people with some college, and in last place are people who haven't graduated from high school.
Top 10 Metro Areas for High-Tech Startup Density:
1. Boulder, Colo.
2. Fort Collins-Loveland, Colo.
3. San Jose-Sunnyvale-Santa Clara, Calif.
4. Cambridge-Newton-Framingham, Mass.
5. Seattle, Wash.
6. Denver, Colo.
7. San Francisco, Calif.
8. Washington-Arlington-Alexandria, DC-Va.-Md.
9. Colorado Springs, Colo.
10. Cheyenne, WY
States with the highest concentration of startups are in order: Arizona, Texas, California, Colorado and Alaska. States with the lowest concentration are in order: W. Virginia, Pennsylvania, Hawaii, Illinois, Indiana and Virginia.
Hard to know what to make of all of this data. As your WPG correspondent writes this blog, from an upstairs window there appears in the distance a neighbor carrying used furniture to a waiting rental truck. She is a recent college graduate, her mildly concerned father explains, while he hefts an antique bookshelf into the vehicle. With few jobs available in her liberal arts field, she moved back home and, with a loan from her parents, started a furniture restoration and retail (spelled upscale flea market) business. It’s now profitable.
Our mythical heroes may not be headed for extinction after all. If we are about to experience a surge in business startups by college graduates who are socially conscious, want to hire their friends, and global in their outlook—you first read it on WPG.
“Hey neighbor! Can we get a little local crowd funding going here?”
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| LUNE40 bearing | 40 | 62 | 80 |
| LUNE30 bearing | 30 | 47 | 68 |