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9/11/16

US Economy: Big Business Is Killing Innovation in the U.S. -

Botanists define a rheophyte as an aquatic plant that thrives in swift-moving water. Coming from the Greek word rhéos, meaning a flow or stream, the term describes plants with wide roots and flexible stalks, well adapted to strong currents rather than a pond’s or pasture’s stillness. For most of the 20th century, U.S. lawmakers worked to maintain just these sorts of conditions for the U.S. economy—a dynamic system, briskly flowing, that forced firms to adapt to the unpredictable currents of the free market or be washed away.

In the past few decades, however, the economy has come to resemble something more like a stagnant pool. Entrepreneurship, as measured by the rate of new-business formation, has declined in each decade since the 1970s, and adults under 35 (a?k?a Millennials) are on track to be the least entrepreneurial generation on record.

This decline in dynamism has coincided with the rise of extraordinarily large and profitable firms that look discomfortingly like the monopolies and oligopolies of the 19th century. American strip malls and yellow pages used to brim with new small businesses. But today, in a lot where several mom-and-pop shops might once have opened, Walmart spawns another superstore. In almost every sector of the economy—including manufacturing, construction, retail, and the entire service sector—the big companies are getting bigger.

In the US the share of all businesses that are new firms, meanwhile, has fallen by 50 percent since 1978. According to the Roosevelt Institute, a liberal think tank dedicated to advancing the ideals of Franklin and Eleanor Roosevelt, “markets are now more concentrated and less competitive than at any point since the Gilded Age.”

Read more: Big Business Is Killing Innovation in the U.S. - The Atlantic

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