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Entrepreneurship in the twenty-first century

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  • John Haltiwanger

    (University of Maryland
    NBER)

Abstract

Employer business startups contribute disproportionately to job creation, innovation, and productivity growth. This contribution is dynamic and complex involving much trial and error. Most startups fail or do not grow but a small fraction grow rapidly contributing substantially to economic performance. In the USA, there has been a decline in startup rate and the share of activity accounted for by young firms over the last couple of decades. This decline has accelerated and become pervasive in the post-2000 period even in innovative-intensive sectors. The flip side of this change is an accompanying increase in the share of activity accounted for by mega (10,000 +) firms in the post-2000 period. While both benign and adverse factors may underlie these structural changes, the post-2000 period has also exhibited a decline in productivity growth along with indicators of business dynamism. The global pandemic has had a major adverse impact on health, morbidity, daily life, and economic activity. However, there has been a surge in new business applications that may signal a turning point in entrepreneurial activity.

Suggested Citation

  • John Haltiwanger, 2022. "Entrepreneurship in the twenty-first century," Small Business Economics, Springer, vol. 58(1), pages 27-40, January.
    • Handle: RePEc:kap:sbusec:v:58:y:2022:i:1:d:10.1007_s11187-021-00542-0
    DOI: 10.1007/s11187-021-00542-0
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    References listed on IDEAS

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    1. Kimberly Bayard & Emin M. Dinlersoz & Timothy Dunne & John Haltiwanger & Javier Miranda & John J. Stevens, 2018. "Early-Stage Business Formation : An Analysis of Applications for Employer Identification Numbers," Finance and Economics Discussion Series 2018-015, Board of Governors of the Federal Reserve System (U.S.).
    2. Ryan A. Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2020. "Changing Business Dynamism and Productivity: Shocks versus Responsiveness," American Economic Review, American Economic Association, vol. 110(12), pages 3952-3990, December.
    3. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 645-709.
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    5. Ryan Decker & John Haltiwanger & Ron Jarmin & Javier Miranda, 2014. "The Role of Entrepreneurship in US Job Creation and Economic Dynamism," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 3-24, Summer.
    6. Decker, Ryan A. & Haltiwanger, John & Jarmin, Ron S. & Miranda, Javier, 2016. "Where has all the skewness gone? The decline in high-growth (young) firms in the U.S," European Economic Review, Elsevier, vol. 86(C), pages 4-23.
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    9. John C. Haltiwanger, 2022. "Entrepreneurship during the COVID-19 Pandemic: Evidence from the Business Formation Statistics," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 1(1), pages 9-42.
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    13. Catherine Buffington & Daniel Chapman & Emin Dinlersoz & Lucia Foster & John Haltiwanger, 2021. "High Frequency Business Dynamics in the United States During the COVID-19 Pandemic," Working Papers 21-06, Center for Economic Studies, U.S. Census Bureau.
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    Cited by:

    1. Jaroslaw Korpysa & Uma Shankar Singh & Swapnil Singh, 2023. "Validation of Decision Criteria and Determining Factors Importance in Advocating for Sustainability of Entrepreneurial Startups towards Social Inclusion and Capacity Building," Sustainability, MDPI, vol. 15(13), pages 1-21, June.
    2. Filippo Biondi & Sergio Inferrera & Matthias Mertens & Javier Miranda, 2023. "Declining Business Dynamism in Europe: The Role of Shocks, Market Power, and Technology," Jena Economics Research Papers 2023-011, Friedrich-Schiller-University Jena.
    3. Naudé, Wim, 2023. "We Already Live in a Degrowth World, and We Do Not like It," IZA Discussion Papers 16191, Institute of Labor Economics (IZA).
    4. David B. Audretsch & Christina Guenther, 2023. "SME research: SMEs’ internationalization and collaborative innovation as two central topics in the field," Journal of Business Economics, Springer, vol. 93(6), pages 1213-1229, August.

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