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The authors, economists Robert Litan and Ian
Hathaway, said their research indicates it is difficult for new
companies to succeed. Startup companies have historically been
the most innovative, they added.
"If we want a vibrant, rapidly growing economy in the future, we
must find ways to encourage and make room for the startups of
the future," the authors said.
Fewer companies are being created and those that have started
are less likely to succeed than they were 20 years ago, they
said. The study, published by the Washington-based Brookings
Institution, found that the failure rate for new companies has
risen sharply to around 27 percent from 16 percent in the early
1990s.
The authors examined data from the Census Bureau, which includes
most U.S. businesses from tiny operations to giants of the
economy. The study found that the share of companies in the
United States that were 16 years or older had increased to 34
percent in 2011 from 23 percent in 1992. (Study: http://bit.ly/1uLTPBB)
During that same period, the share of workers employed by mature
companies increased from 60 percent to 72 percent. Nearly four
out of five Americans work for a company that was founded before
1995.
The study follows up on previous research by Litan and Hathaway
that found new businesses have been in decline for three
decades.
(Reporting by Moriah Costa; Editing by Lisa Shumaker)
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