The economic engine of the United States was built by the efforts of small businesses, not large ones. This is validated even today, for example, by the fact that more than 60 percent of new jobs are created by companies with fewer than 500 employees.
I’m also probably biased to say it, but the vast majority of innovation (which can’t be objectively measured) continues to be provided by smaller entrepreneurial companies. This is why it alarms me that, despite the growth in the cultural popularity of entrepreneurship, the rate of new business formation is in a long-term decline. And what’s worse, the young are a smaller share of entrepreneurs than they were 25 years ago. In 1992, 44 percent of business owners were under age 45; now only 22 percent are. That is a very disturbing trend that we need to reverse.
