Surprise: New figures out of the Census Bureau show that the rate at which Americans are starting new businesses is at a record low.
With Facebook’s billion-dollar acquisition of Instagram and impending IPO things sure seem fizzy in Silicon Valley, leading to a whole lot of speculation about whether we’re in a tech bubble. There are compelling arguments on both sides of the debate, but there’s one thing no one can argue with—cold, hard data. And the Census Bureau just released a bunch on start-ups in America.
What’s the headline takeaway? The formation of new businesses has actually fallen to record lows. Start-up mania and the stated ambitions of many to escape their cubicles and found their own ventures aside, Americans overall are starting far few new businesses. New firms made up 13% of all businesses in the 1980s, then fell to just less than 11% in 2006. Now the percentage has dipped sharply with young firms representing just 8% of businesses in 2010, the most recent available data. [read]