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by nostrademons
4421 days ago
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There are many other possible explanations for fewer new businesses: 1. Technology has disintermediated many of the barriers in bringing your service directly to customers, and so more people are becoming freelancers rather than working for an organization. I would love to see this chart compared to rates of self-employment, Kickstarter campaigns, and people who make their living off EBay. 2. We're in a cyclical depression in new business formation. The economy is still pretty sluggish; few people feel they can gamble on striking out alone under these conditions. 3. New businesses are either folding quickly (before the one-year mark) or getting acquihired, because technology makes the feedback cycle of whether or not an idea is going to work faster. |
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1. Despite EBay and freelancing self-employment has steadily declined from at least the 1970s[1]. I read somewhere once this has been go inning on for more than 100 years.
2. As shown in the main graph of the original post this has been going on since themid-1970s. So it's secular not cyclical.
3. The graph in the original post shows business "less than a year old" so they don't need to make it to the one year anniversary. So this is not caused by survivorship bias.
I also have a very technology focused worldview but we need to keep in mind while awesome and very important it is only a tiny fraction of US employment and GDP.
[1] http://blogs.hbr.org/2014/02/where-are-all-the-self-employed...