The Silver Lining of the Coronavirus Pandemic

Summary of Study

Bottom Line: The silver lining of the coronavirus pandemic is that it offers the opportunity to place entrepreneurship at the center of the economic recovery, reversing a longstanding decline in new firms. Even before this natural disaster, there were many systemic problems facing the economy, which has been propped up by debt and easy money, not entrepreneurship. The new American Dream is a democratized vision of entrepreneurship where creators from all over the country can achieve their goals. 

A storm was brewing with many systemic problems in the economy, which a natural disaster has sent boiling over into a global recession. Political divisions and global tensions have also been increasing.

Oil was the first economic domino to fall, plunging into negative price territory. Currently, there are many historical parallels to 1929, when the natural disaster of the dust bowl was the proximate event that started the Great Depression.

Entrepreneurship has long been on the decline in the U.S., with new business formation as a percent of all firms roughly halving over the last generation. In 1977, there were 95 new entrepreneurs for every one billion dollars of GDP; today there are just 43. The new Amerian Dream is one with thousands of new entrepreneurs because the U.S. is a nation of builders.

More than 35 million jobs have been lost over the past several weeks, and the unemployment rate is highest since the Great Depression. Many of these lost jobs will not return. Many of the formerly employed can become entrepreneurs instead. 

Most Fortune 500 firms were founded in periods of economic distress. New businesses account for nearly all new jobs. The public and private sectors must work together to reinvigorate the American economy.

Venture capital plays a vital role in supporting new companies, with entire industries growing out of its support. Yet only a few states have venture capital; California, Massachusetts, and New York make up 85 percent of the nation's venture capital investments.

In this recovery, emerging geographical entrepreneurial hubs will play a key role. These new hubs require an engine of innovation to drive productivity and economic growth to support a new generation of entrepreneurs. This effort to turbocharge entrepreneurship to build a broader recovery is the space race of our lifetime.

Read the full presentation HERE

Feature Charticle

The New American Dream: A Nation of Entrepreneurs

Ecliptic Capital

Findings:

  • Entrepreneurship has long been on the decline in the U.S., with new business formation as a percent of all firms halving over the last generation.
  • In 1977, there were 95 new entrepreneurs for every one billion dollars of GDP; today there are just 43.
  • The new Amerian Dream is one with thousands of new entrepreneurs because the U.S. is a nation of builders.
  • The silver lining of the coronavirus pandemic is the opportunity to dramatically increase American entrepreneurship in the years to come. 

Read the full presentation HERE