Several commentators have recently highlighted the Global Entrepreneurship Monitor’s finding that the share of U.S adults starting or running a new business increased by 60 percent from 2010 to 2011. While I understand the desire to focus on the positive after so many years of declining entrepreneurial activity in the United States, I’m not sure the GEM results really signal good news about entrepreneurship.
To see why requires an understanding of the difference between the stock of entrepreneurs and the flow into entrepreneurship. Think of entrepreneurship like a bathtub of water. The stock of entrepreneurs is akin to the level of water the in the tub. The flow into entrepreneurship is similar to the amount of water coming through the faucet. Unmeasured in this analogy is the flow out of entrepreneurship, which is like the amount of water going down the drain.
To read the full, original article click on this link: Did the Entrepreneurship Exit Rate Surge in 2011?
