Number of Startup Businesses Has Dropped During Past 20 Years

An educated observer would probably think that entrepreneurship represents one of the strongest segments of the U. S. economy. 

Number of Startup Businesses Has Dropped During Past 20 Years 

An educated observer would probably think that entrepreneurship represents one of the strongest segments of the U. S. economy. 

But apparently that's not the case. In 2011, the latest year for which data is available, the number of new startup businesses was 131. 3 per 100, 000 individuals, down 29 percent from 185. 6 in 1991, according to the Kauffman Foundation and Census Bureau. 

" That raises some concerns about what's going on, " Dane Stangler, Kauffman's vice president of research and policy, tells CNBC. The recent surge of high-technology startups " is a blip in a long-term decline in high-tech startup rates and dynamism. " 

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Factors depressing startups include visa limits for skilled workers and the explosion of student debt, which makes starting a new business financially unfeasible for some young people, according to CNBC. 

Another ominous development is that startups are either growing big fast or being taken over by bigger companies, the news agency reports. That leaves a dwindling number of mid-size firms to grow organically and means less innovation and job creation. 

In addition, younger entrepreneurs aren't taking over fast enough from their retiring brethren to keep the numbers up, according to Kauffman. 

However, you wouldn't think startups are on the wane by looking at venture capital investments. Venture capitalists invested $29. 4 billion in 3, 995 deals in 2013, up 7 percent in dollars and 4 percent in deals from 2012, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association. 

" The fourth quarter and 2013 year-end numbers show that there is a lot of energy around Internet-specific companies and stronger interest in biotechnology, " says Bobby Franklin, CEO of the National Venture Capital Association