The Future of Entrepreneurship

There have been a lot of tendentious arguments made for the struggles of American entrepreneurs in very recent years, most of them associated with claims about tax and regulatory burdens that have grown regularly lighter as the decades have gone by. But actual research is showing some very different reasons, as noted at Ten Miles Square today by Dane Stangler and Jordan Bell-Masterson of the Kauffman Foundation:

In a forthcoming paper, the Kauffman Foundation analyzes different trends and scenarios for why entrepreneurship may rise or fall. We can briefly canvass some reasons for optimism here.

Returning to demographics, over the next 20 years we will have more thirty-somethings than ever before. This matters because the “peak age” for entrepreneurship is the late thirties and early forties. While we might not expect an outright entrepreneurial boom, as Vox’s Matt Yglesias suggests, we are more optimistic than 538’s Ben Casselman, since the decline of the prime-age entrepreneurial population has coincided with the decline of high-tech entrepreneurship (as opposed to the big-box retailer driven decline in the decades prior).

Likewise, we might expect that the proliferation of entrepreneurship education and training programs across the country could translate into more new businesses over the next several years. And, the expansion of crowdfunding sites should encourage a higher level of entrepreneurial activity.

The present state of entrepreneurship, at least according to recent research, may not seem particularly healthy. But there are reasons to think that picture may be incomplete, and plenty of reasons for expecting an entrepreneurship boom in coming years.

Booms are never as widely predicted as busts, but this is one that is if not predictable then certainly very plausible.

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Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.