[E]ntrepreneurs throughout modern economic history…have been disproportionately responsible for truly radical innovations – the airplane, the railroad, the automobile, electric service, the telegraph and telephone, the computer, air conditioning, and so on – that not only fundamentally transformed consumers’ lives, but also became platforms for many other industries that, in combination, have fundamentally changed entire economies.” ~ Robert Litan and Carl Schramm
The United States has an economic growth problem. From the 1960s through the 1990s, the U.S. economy grew at an inflation-adjusted average annual rate of 3.5 percent, while employment increased at an average annual rate of 2.3 percent. [1] Since then, gains in both measures have slowed substantially – averaging, respectively, 1.9 percent and 0.7 percent per year between 2000 and 2016.
Similarly, growth in labor productivity – an efficiency measure for the economy, also used as a rough proxy for innovative activity – has slowed to an average annual growth rate of 0.9 since 2010, compared with an average of 2.2 percent per year during the previous five decades (1960s-2000s). In other words, the pace at which the economy has been increasing output for a given level of inputs – the key to long-term economic growth and rising standards of living – has slowed significantly.
Clearly, something has broken down inside the economic engine, and we’ll need a swift reversal in those trends to ensure economic prosperity – and, importantly, broader participation in that prosperity – both now and in the future. A revival of American entrepreneurship is central to achieving those national objectives for several reasons:
No comments yet