The Role of Entrepreneurship in US Job Creation and Economic Dynamism

By Ryan A. Decker, John C. Haltiwanger, Ron S. Jarmin, Javier Miranda. 2014

1,059 citations recorded by the source corpus.

The United States has long been viewed as having among the world’s most entrepreneurial, dynamic, and flexible economies. It is often argued that this dynamism and flexibility has enabled the US economy to adapt to changing economic circumstances and recover from recessions in a robust manner. While the evidence provides broad support for this view, the outcomes of entrepreneurship are more heterogeneous than commonly appreciated and appear to be evolving in ways that could raise concern. Evidence along a number of dimensions and a variety of sources points to a US economy that is becoming less dynamic. Of particular interest are declining business startup rates and the resulting diminished role for dynamic young businesses in the economy. We begin by describing how the concept of entrepreneurship is reflected in existing data on firm age and size. The recent addition of firm age to official statistics represents a dramatic improvement in the information available to entrepreneurship researchers. We then turn to a discussion of the role of startup firms in job creation. Business startups account for about 20 percent of US gross (total) job creation while high-growth businesses (which are disproportionately young)

Subfields: Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/e8b27cdca96dcd5572a35e4b5371aa8a9ae367da

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Citations in the corpus

Missing Growth from Creative Destruction (2017, methodology): “…missing growth One may wonder why we get missing growth estimates that remain high, even though creative destruction as measured by the rates of entry, exit and job-reallocation are known to have declined continuously over the whole period (declining dynamism as documented by Decker et al. 2014).”
Advanced Technologies Adoption and Use by U.S. Firms: Evidence from the Annual Business Survey (2020, positive): “This is important because these firms are central to economic growth and dynamism (e.g., Haltiwanger et al. 2013 & 2016; Decker et al. 2014 & 2017), yet we have evidence that they respond differently to new advances in information technology in general (Hitt and Tambe 2016) and to new technologies…”
Personality Traits of Entrepreneurs: A Review of Recent Literature (2018, positive): “Moreover, the rate of new business formation is declining in the United States (e.g., Decker et al., 2014).”
Changing Business Dynamism and Productivity: Shocks versus Responsiveness (2020, background): “Decker et al. (2016b) report the decline in the firm-based reallocation rate for the United States (see their Figure A1).”
Reallocation in the Great Recession: Cleansing or Not? (2016, neutral): “24 See Davis et al. ð2007Þ, Hyatt and Spletzer ð2013Þ, Davis and Haltiwanger ð2014Þ, and Decker et al. ð2014a, 2014bÞ for discussions of determinants of declining trends in job flows.”
What Happened to US Business Dynamism? (2019, methodology): “A is taken from Andrews, Criscuolo, and Gal (2016), B fromDecker et al. (2020), C fromDecker et al. (2016), and D from Autor et al.”
Market Power and Innovation in the Intangible Economy (2019, background): “Signs that dynamism is weakening include the decline in the rate at which workers reallocate to different employers (e.g. Davis et al. 2006, Decker et al. 2014), the decline in skewness of the firm-growth distribution (e.g. Decker et al. 2016) and the decline in the start-up rate (e.g. Pugsley and…”
Democracy and Entrepreneurship (2020, background): “Decker et al. (2014) show that the share of young firms, measured as younger than five years old, declined from 47 percent in the late 1980s to 39 percent by 2006.”
Declining Business Dynamism in the United States: A Look at States and Metros (2014, neutral): “(2014) use firm-level data to show that declining dynamism is a pervasive force in a broad range of sectors throughout the economy—even after controlling for changes in the underlying composition of firms (age, size, industry).(5) Even a cursory review of broader U.”
Age and High-Growth Entrepreneurship (2020, background): “Yet entrepreneurship is a risky business (Decker et al. 2014, Kerr et al. 2014), where many new firms exit quickly and only a small fraction of young firms exhibit very high growth (Haltiwanger et al. 2013, 2017).”
Changing Business Dynamism and Productivity: Shocks vs. Responsiveness (2018, methodology): “(2007), Decker et al. (2014, 2016), Davis and Haltiwanger (2014), Hyatt and Spletzer (2013) and Malloy et al.”
How Destructive Is Innovation? (2019, background): “Most of the decline in the aggregate job reallocation rate highlighted by Decker et al. (2014) was due to the decline in the job creation rate.”