Jay Shambaugh and colleagues at the Brookings Institution argued: In recent years it has become clear that young firms—and not necessarily small firms, as is commonly supposed—are the engine of employment and productivity growth in the United States. As they introduce new technologies and business methods, new firms contribute substantially to productivity growth.

a. Why might new firms be more likely than older firms to introduce new technologies and business methods?
b. Assuming that these economists are correct about the importance of new firms in introducing productivity enhancing innovations, what are the implications for the future of the U.S. economy of recent trends in the formation of new businesses?