Comments for The NYT's Romance of Start-up Businesses at http://www.cepr.net , comment 1 to 5 out of 5 comments http://www.cepr.net Sun, 19 May 2013 15:34:36 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyts-romance-of-start-up-businesses#comment-19353 The flip side of the start-up job creation numbers is that most start-ups fail, losing large numbers of jobs. And successful start-ups destroy jobs. It's part of the jobs myth we don't like to look at. So, start-ups good, but not miraculous engines of the economy. Small businesses in general are often touted as the creators of most new jobs in America; 70%, we're told. But small businesses go out of business at a pretty brisk rate, so the net gain is not nearly so impressive. And some start-ups are not all that good for the economy. Not long ago, Walmart was a start-up. Now it is a magnificent engine for shipping the disposable income of Americans to China, skimming some cream along the way for one super-patriotic American family. The jobs and small businesses destroyed in the process would fill a cemetery the size of the intermountain West. - Red Planet Sat, 06 Oct 2012 08:11:57 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyts-romance-of-start-up-businesses#comment-19330 I ran across this interesting paper about the decline of startups over the last 30 years in the US. These are all startups and not just tech. Funny thing is that it appears that the increase in H1Bs and VC funding haven't produced the big strides in startups that we've been lead to believe. Maybe there is more to the recipe than hype,STEM employees and VC funding? http://www.census.gov/ces/pdf/BDS_StatBrief6_Young_Firms.pdf On BusinessInsider there is a piece I was reading which considers the US place in the startup and innovation race globally. In this piece the author takes a contrary position to the mainstream and shows some reasons we should not be too full of ourselves. - RC Fri, 05 Oct 2012 08:56:12 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyts-romance-of-start-up-businesses#comment-19312 Low interest rates make it more attractive for businesses, whether old or new, to buy expensive new labor-saving equipment rather than use old inefficient equipment. - skeptonomist Fri, 05 Oct 2012 03:23:03 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyts-romance-of-start-up-businesses#comment-19311 Productivity growth is probably strongly dependent on startups. Old businesses tend to keep the same old equipment and methods, whereas new businesses will normally buy the latest and most efficient equipment. Totally new products are in many cases more labor-saving than old ones - this has certainly been the historical trend - and new products often mean new businesses. If this is correct, then startups should be more capital intensive than old businesses (testable) and should as a rule use fewer employees (consistent with the NYT story). - skeptonomist Fri, 05 Oct 2012 03:12:26 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-nyts-romance-of-start-up-businesses#comment-19310 Why not romance the crowding out of what could have been vibrant start-ups by winner-take-all predators who crush other start-ups in the cradle? After all, harvesting economic rent with massive market power by taking over natural and network monopolies, merging with each other and buying up patents and the like does create well paying jobs requiring little effort since they redistribute the economic pie to themselves rather than grow it. It also assures that output cannot grow faster than jobs are added since the essential goal of a monopoly is to produce less at higher prices. Given the standard propaganda line from corporate America to improve efficiency with win-win outcomes every time another move is made to kill off competitive start-ups, MSM could report this also solves the problem of excess supply output per worker since each worker is so efficient, wages explode upward so high that consumption demand maintains full employment as far as the eye can see. - Last Mover Fri, 05 Oct 2012 01:40:36 +0100