The US needs more entrepreneurs. In fact, the world needs more entrepreneurs. So says a recent study out of Pepperdine University, which puts some numbers to what it costs the US and other countries when they don’t have the right balance of entrepreneurs and established companies. The study, authored by students Catherine Bampoky and Aolong Liu, along with professors Luisa Blanco and James Prieger (hereafter, BBLP), examines the “economic growth penalty” that a country pays when its entrepreneurship deviates from its optimal level. How could there be an optimal level of entrepreneurship? Isn’t more always better? Not according the study. While it is clear that having too few entrepreneurs can lead a country to see slow economic growth and lagging international competitiveness, BBLP explain that too much entrepreneurship – in the form of too many new businesses relative to established ones – can also negatively impact growth.
Read “Wanted: More entrepreneurs” on AEI.