Fewer Startups Hurt U.S. Economy

Two economics professors have determined that the U.S. will suffer over a trillion dollars of lost business output due to the lack of new business startups in recent years.

Messrs. Prescott and Ohanian have determined that the number of new startups was 30% lower in 2011 (latest data) compared to the annual average in the 1980s in all industries, even including high tech. Bad news because new businesses boost employment and the economy as a whole.

Entrepreneurs complain that they are restrained by overregulation, too much taxation, lack of skilled workers and, of course, unavailability of financing.

While crowdfunding cannot help in the policy areas, it can certainly fill the financing gap left by the banking industry that still won’t lend unless the company doesn’t need the loan.

See the article here: http://online.wsj.com/articles/behind-the-productivity-plunge-fewer-startups-1403737197



About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in Banking, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Investments, Jobs, Legislative Intent, SEC, Small Business, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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