There was a time not so long ago when America was the land of opportunity. A time when if you had a good idea and the willingness to work hard, you could start your own business and achieve the American dream. Sadly, those days are gone. Today, America is a country that is increasingly hostile to entrepreneurship.
One need only look at the statistics to see the decline of entrepreneurship in America. In 1980, nearly 13 percent of American workers were self-employed. Today, that number has fallen to less than 10 percent. The number of new businesses being created each year is also in decline. In 1980, there were over half a million new businesses being created each year. Today, that number has fallen to just over 400,000.
There are a number of factors that have contributed to this decline. Firstly, the rising cost of starting a business. When I started my first business in the early 1990s, I was able to do so with just a few thousand dollars. Today, the average start-up costs over $30,000. This is simply too much for many aspiring entrepreneurs to come up with.
Secondly, there is an increasing amount of regulation that makes it harder to start and run a business. Today, there are thousands of pages of federal regulations that must be complied with. In addition, there are countless state and local regulations that businesses must navigate. The compliance costs associated with all of these regulations are estimated to be over $1 trillion each year.
Thirdly, our education system is increasingly failing to produce graduates with the skills necessary to be successful entrepreneurs. For generations, America had the best education system in the world. Today, we have fallen behind many other countries. According to the Organization for Economic Cooperation and Development (OECD), American students rank 35th in math and 27th in reading when compared to students from other developed countries.
The decline of entrepreneurship in America is something that should concern us all—regardless of our political beliefs. This decline is indicative of a larger problem within our society—a problem that if left unchecked will continue to erode the very fabric of what has made America great. We must reverse this trend by making it easier for people to start businesses and by investing in education so that our children have the skills they need to succeed in an increasingly competitive global economy.