One of the notable things about the 2008 financial crisis was how people stopped setting up businesses. Faced with economic uncertainty, it seemed most folk decided starting new ventures was just too risky.
The OECD’s Entrepreneurship at a Glance report shows just how dramatic that fall in small business creation since the financial crisis has been with United States’ current new business formation rates at 15% below 2008 levels, Italy’s at 35% and Germany’s at 23%.
Even in Australia, which largely escaped the 2008 crisis, business formations are twenty percent lower. This is despite interest rates being close to zero for the last five years.
Those statistics are telling – despite the talk about tech startups, people are not starting new ventures at the rates they were ten years ago. That’s a worrying aspect for economies and future growth prospects.