Entrepreneurship has been declining for 30 years

by Ryan Streeter on May 18, 2012. Follow Ryan on Twitter.

Every now and then, a little perspective is in order. This graph distills better than any other I’ve seen what can be called the secular decline in entrepreneurialism in America:

What does it mean? Basically, the graph says that regardless of ups and downs in the economy, entrepreneurship in America has been in decline for a few decades.

It’s from a new, important study (pdf) from the Kauffman Foundation.

What it says is incredibly counterintuitive. We tend to think of the pre-dotcom crash in the 1990s as an amazing moment for entrepreneurship in America. When you look at the graph, you see that’s not the case. We had more new businesses and jobs from new businesses when Ronald Reagan was elected President than when Bill Clinton was done being President.

The question is what this means. Truth be told, no one really knows the answer. One thing is for sure: all growth and “good times” in the past 30 years have been the result of more older than younger firms.