What's caused the US startup slump?

Washington

THERE'S more discouraging news about American business - specifically about entrepreneurship. We confidently assume that we have the world's most entrepreneurial nation, and the proof seems overwhelming. Google, Facebook and Twitter are but three (relatively) recent startups that have become corporate titans. Before them, there were others: Microsoft, Intel and FedEx. We seem to excel at nurturing new firms.

Or do we?

Previous studies have shown that, despite the success of firms such as Facebook, the number of startups has dropped sharply, from about 13 per cent of all firms in the late 1980s to about 8 per cent in 2011. Now, a new study from the National Bureau of Economic Research (NBER) reports that the expansion of the remaining startups - which traditionally has been much faster than the growth of existing companies - has slowed considerably. B…