Aaron M. Renn of The Urbanophile, recently wrote an interesting article in Governing called, Where’s America’s Entrepreneurial Economy? In it, he argues that despite the fact that there’s a perception that entrepreneurship is on the rise, overall rates are actually declining.
The Brookings Institution found that so-called “firm entry rates” have declined since the 1970s and that they suffered a steep fall post-2005. And though millennials are often seen as an entrepreneurial generation, The Wall Street Journal reports that business ownership among those under the age of 30 recently hit a 24-year low. Self-employment has seen a similar downward trend. A study by Economic Modeling Specialists International found that both the total number of self-employed and their share of jobs have fallen since 2006.
His argument is that outside of tech — where yes, the barriers to entry have fallen significantly over the years — it has actually become harder to start a company in a lot of other cases. And he specifically mentions two industries where he believes that is very much the case: construction and real estate.
Why is that?