Bloomberg Business – December 14, 2016
by Patrick Clark
A few years ago, economists started making noise about the decline of business dynamism. In the simplest terms, that’s the rate at which American entrepreneurs were launching new enterprises and folding old ones. In the late 1970s, when the U.S. Census started keeping track, almost 15 percent of businesses were less than a year old. By 2011, that figure had fallen to less than 10 percent.
One theory championed by Stacy Mitchell, co-director of the Institute for Local Self-Reliance, is that national chains took advantage of lax antitrust enforcement to squeeze out mom-and-pops. “The decline of small business and entrepreneurship is owed,” Mitchell wrote in a report published in August, “to anticompetitive behavior by dominant corporations, which routinely use their size and market power to undermine and exclude their smaller rivals.”
Not everyone thinks that’s a bad thing. Many economists view Main Street retailers as less productive and less stable than big chains; the important business startups, that argument goes, are the young companies that get big fast, creating new jobs that the economy needs.