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Wow, impressive article especially considering it comes from (I think) a junior at Princeton https://www.linkedin.com/pub/evan-soltas/29/5/b44 https://www.linke

Wow, impressive article especially considering it comes from (I think) a junior at Princeton https://www.linkedin.com/pub/evan-soltas/29/5/b44 https://www.linkedin.com/pub/evan-soltas/29/5/b44 My only gripe is that he thinks that entrepreneurship and investment are struggling. If they're struggling now, then they've been struggling through all of human history.

Shivetya 12y ago
what I think needs to be taken away from this is that to fix areas were we think there is little competition which causes the conditions he sees is that we need to remove regulation which acts as a barrier to entry. far too many business are protected by heavy regulatory burdens to the point that to enter into such the costs of compliance eat up any slack which reduces your ability to react.
- genericuser 12y ago
  I agree those barriers should be removed in the majority of cases, as in the majority they seem to be purely protection for already existing businesses. However it is important to note that some of the areas with the least competition, most regulations, and highest compliance costs exist in such a state due at least in large part to honest safety concern. Aerospace and Medical are the two broad areas that have many facets that immediately come to my mind as falling into this category. Just saying it is important to remember our goal is safely bettering the world, not simply being able to stand atop a burning pile of rubble and yell Anarchy. Although I believe that sounds like a lot of fun too.
fauigerzigerk 12y ago
I don't know about entrepreneurship but investment is definitely struggling. As a share of GDP it is relatively low right now compared to the long run average (in the U.S). And that is in spite of exceptionally low interest rates. However, investment as used in GDP calculations comprises more than just business investment. It also includes construction of new homes for instance. So to compare investment to corporate profits, which are indeed relatively high, you would need to know the level of business investment and I don't know where to find that data right now.
cowsandmilk 12y ago
> My only gripe is that he thinks that entrepreneurship and investment are struggling. Entrepreneurship is extremely hyped right now, despite being at a relative low historically (Figure 1 of [1]). More companies are failing in their first year (Figure 4, 5, D1, D3 of [2]) and an increasing percentage of employment is at firms 16+ years old (Figure 2, A2, C2 of [2]). Less people starting companies, more companies failing in the first year, more people employed at well-established companies. That sounds like entrepreneurship is struggling to me. [1] http://www.kauffman.org/~/media/kauffman_org/resources/2015/soe/2015_state_of_entrepreneurship_address.pdf http://www.kauffman.org/~/media/kauffman_org/resources/2015/... [2] http://www.brookings.edu/~/media/research/files/papers/2014/07/aging-america-increasing-dominance-older-firms-litan/other_aging_america_dominance_older_firms_hathaway_litan.pdf http://www.brookings.edu/~/media/research/files/papers/2014/...
- esoltas 12y ago
  Someone beat me to posting the Kauffman research... Also, the investment to GDP ratio is here, although a lot of the decline was housing: http://research.stlouisfed.org/fred2/graph/?g=14LZ http://research.stlouisfed.org/fred2/graph/?g=14LZ.

Shivetya 12y ago

what I think needs to be taken away from this is that to fix areas were we think there is little competition which causes the conditions he sees is that we need to remove regulation which acts as a barrier to entry. far too many business are protected by heavy regulatory burdens to the point that to enter into such the costs of compliance eat up any slack which reduces your ability to react.

genericuser 12y ago
I agree those barriers should be removed in the majority of cases, as in the majority they seem to be purely protection for already existing businesses. However it is important to note that some of the areas with the least competition, most regulations, and highest compliance costs exist in such a state due at least in large part to honest safety concern. Aerospace and Medical are the two broad areas that have many facets that immediately come to my mind as falling into this category. Just saying it is important to remember our goal is safely bettering the world, not simply being able to stand atop a burning pile of rubble and yell Anarchy. Although I believe that sounds like a lot of fun too.

fauigerzigerk 12y ago

I don't know about entrepreneurship but investment is definitely struggling. As a share of GDP it is relatively low right now compared to the long run average (in the U.S). And that is in spite of exceptionally low interest rates. However, investment as used in GDP calculations comprises more than just business investment. It also includes construction of new homes for instance. So to compare investment to corporate profits, which are indeed relatively high, you would need to know the level of business investment and I don't know where to find that data right now.

cowsandmilk 12y ago

> My only gripe is that he thinks that entrepreneurship and investment are struggling. Entrepreneurship is extremely hyped right now, despite being at a relative low historically (Figure 1 of [1]). More companies are failing in their first year (Figure 4, 5, D1, D3 of [2]) and an increasing percentage of employment is at firms 16+ years old (Figure 2, A2, C2 of [2]). Less people starting companies, more companies failing in the first year, more people employed at well-established companies. That sounds like entrepreneurship is struggling to me. [1] http://www.kauffman.org/~/media/kauffman_org/resources/2015/soe/2015_state_of_entrepreneurship_address.pdf http://www.kauffman.org/~/media/kauffman_org/resources/2015/... [2] http://www.brookings.edu/~/media/research/files/papers/2014/07/aging-america-increasing-dominance-older-firms-litan/other_aging_america_dominance_older_firms_hathaway_litan.pdf http://www.brookings.edu/~/media/research/files/papers/2014/...

esoltas 12y ago
Someone beat me to posting the Kauffman research... Also, the investment to GDP ratio is here, although a lot of the decline was housing: http://research.stlouisfed.org/fred2/graph/?g=14LZ http://research.stlouisfed.org/fred2/graph/?g=14LZ.