Data from the Census Bureau for the Economic Innovation Group (EIG), a bipartisan research and advocacy organization, shows the extremes, by American counties, at which small businesses are growing compared to past recessions. From 1992 to 1996, 125 counties were responsible for half of the country’s new businesses. However, this number has progressively dwindled to 64 counties from 2002 to 2006, and to only 20 counties from 2010 to 2014. This is great for those 20 counties, but the shrinking numbers in rural America signals low job growth, which can have devastating consequences for the local and national economy. This slowdown has led the bureau to label the period a Startup-less Recovery.
(Source: Economic Innovation Group)
Furthermore, the rate of small business closures is also growing in rural America. From 1992 to 1996, 17% of counties saw small-business establishments close. This number grew to 37% during the 2002 to 2006 census, and most recently to a staggering 57% closure rate. These closing businesses are significantly more concentrated in cities with less than 500,000 residents.
The EIG report shows new-business growth to be overwhelmingly concentrated in highly populated, tech-focused areas, such as Silicon Valley, New York City, Miami, and parts of Texas. In these locations people tend to be highly educated and skilled, and capital flocks to these high-growth entrepreneurs and their endeavors. To make matters even more divisive, the demographic of this industry is overwhelmingly white and male (Harvard Business School) and middle to upper class. If this trend continues, the income and unemployment gap will continue to widen, not only by geographic location but by race and gender as well.
With these sobering statistics in mind, Hidden Star has taken the initiative to stimulate small-business growth all across America, particularly to those under-resourced regions. We understand that to propel economic growth, America needs businesses reflective of its people, despite their race, geography, or social status. Hidden Star’s goal is to reach as many Americans as possible and provide them with the resources and assistance they need to start their own businesses. At Hidden Star, we are helping Americans achieve their business goals, and we can help you, too. For more information, visit our Get Help from Hidden Star page.