July 27, 2004

Bush Boom: Entrepeneurship On The Rise

Professor Jeff Cornwall comments on new data about the entrepreneurs at the core of the American economic recovery...

Almost one out of every eight Americans (11.9%) is engaged in entrepreneurial activity. This is one of the highest rates in the world and the highest rate of the largest, most developed economies. Our culture remains the strongest force driving entrepreneurial activity that differentiates us from other nations studied. America outranks the rest of the world in all of the key entrepreneurial indexes.

One myth that the cynics like to perpetuate is that these are mostly people out of work who cannot find a job. This study found that 76% of new start-ups were created to pursue opportunities their founders saw in the market, while only 24% were folks looking to create some income between jobs, typically as self-employed consultants.

Who are these American entrepreneurs? They tend to be young, as the study found the highest rate of entrepreneurship (17.3%) in 25-34 year olds. African Americans and Hispanics have the highest rates overall.

There are many voices, especially in Boston this week, that are still looking to the old economy to move us ahead. This report offers more evidence that this is a new economic age. The new economy will require leadership that understands that the old strategies of duplicity between big government and big corporations no longer will create growth or progress. An age of entrepreneurship requires a strategy of truly free markets, and not a managed economy using tax policy and governmental corporate largess to pick winners and losers.

So, entrepreneurs are both powering the growing economy and benefiting from it. And just why are both growing? Anyone care to blame the Bush tax cuts?