Entrepreneurship Is on the Decline in the U.S.

Where have all the entrepreneurs gone?

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Scott Shane
Scott Shane

One of the most common misperceptions about America is that we are becoming more entrepreneurial over time. Growing entrepreneurship is a common theme in many newspaper and magazine articles about this country. But the statistics tell a different story.

In other places, I have discussed the myth of increasing entrepreneurship in greater detail than I can here. But I want to show some recent statistics to illustrate that this downward trend is persisting.

So I produced the table below from the most current information on entrepreneurship available—the Bureau of Labor Statistics data on self-employment in non agricultural industries.

The data show that the self-employment rate was 0.6 percent lower at the end of 2008 than it had been a decade earlier. Moreover, the rate of decline in entrepreneurship appears to have accelerated in the past three years. That's evidence of America becoming less entrepreneurial, not more entrepreneurial, over time.

Self-Employment Rate in Nonagricultural Industries, 1998-2008

Source: Bureau of Labor Statistics web site

Scott Shane is A. Malachi Mixon III professor of entrepreneurial studies at Case Western Reserve University. He is the author of The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By, among other books.

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