The USA has long been seen as the home of a vibrant entrepreneurial economy, but the statistics call this into question. From 1977 to 2011, the number of new start-up firms in the United States declined by 28 percent. More dramatically, relative to the size of the working population, the number of new start-ups has fallen by half. Even Silicon Valley has seen the rate of new business start-ups decline by 50 percent over the last three decades. Entrepreneurial actions have fallen most sharply among younger adults. People aged 20 to 34 created only 22.7 percent of all new companies in 2013, down from 34.8 percent in 1996. This is an ironic change given that enrolment in college entrepreneurship programs has been growing. This declining rate of entrepreneurship is setting off warning bells for many. It leads to less innovation in the economy and slower job opportunity growth. Over the long run, it would lead to lower living standards and stagnant economic growth. Concerns on this issue have led to a discussion of the underlying causes of this change. The causes of this decline may be emotional or institutional. On the emotional level, it may be that the after-effects of the Great Recession have tilted society toward risk aversion. Additionally, many would-be entrepreneurs are saddled with significant student loan debt, leaving them less willing to take on the risk of entrepreneurship. Consistent with this view, Audrey Baxter, a woman who won a business proposal award as a student at UCLA, opted to take a corporate job when she graduated rather than pushing her small business forward. 

The drop in the rate of entrepreneurship is it really a matter of concern? If so, the why? State the reasons.

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The drop in the rate of entrepreneurship is it really a matter of concern If so then why State the reasons Yes a drop in the rate of entrepreneurship ... View the full answer