Things aren’t looking good for small business in Main Street America.
Despite recent trends that show entrepreneurs – in sheer defiance of the slow economic recovery and tangled regulatory burdens – are remaining optimistic and still pushing to start new small businesses, the statistics present a far more troubling and unwelcoming reality.
Simply put, the hurtles to entry are too imposing for entrepreneurs these days.
A recent Washington Post report reveals that Americans in small towns and rural communities are “dramatically less likely to start new businesses than they have been in the past.” Calling it “an unprecedented trend that jeopardizes the economic future of vast swaths of the country,” the report details how the supposed recovery from the Great Recession has apparently not been felt by the majority of Americans.
Where it has been felt has been limited to a few small geographic pockets – Silicon Valley, New York City and parts of Texas – while a new analysis from the Census Bureau shows that the rest of the nation may as well still be in a recession, at least when it comes to small enterprise.
This is especially troubling, because the supposed recovery touted by Obama has not been a nation-wide recovery. The reality is that more than half of this economic recovery has been driven by just 20 counties, this in a nation of more than 3,000 counties. In other words, a few successful outliers are skewing the numbers, giving the Obama administration a misleading talking point to throw about while Americans continue to face the hardships of economic stagnation.
“The data suggest highly populated areas are not adding start-ups faster now than they did in the past; they appear simply to be treading water,” the report notes. “But rural areas have seen their business formation fall off a cliff.”
What’s worse, other experts “warn that the trends could be self-perpetuating and endanger the very life of rural economies in the years to come.”
“It’s going to get much much worse,” said John Lettieri, a former Republican Congressional aide who is a co-founder of the Economic Innovation Group, speaking to the Washington Post. “As bleak as these numbers are now, these may be the good years.”
If these are the good years, it’s hard to imagine what the bad years will look like.
Head over to the Washington Post to read the full damning report.