imagesA just released report by the Brookings Institute offers disturbing news on the state of the U.S. economy, but more importantly of business entrepreneurship in America.

The Brookings Institute report released its finding and stated the overall message was business dynamism and entrepreneurship is experiencing a troubling secular decline in the United States.

Continuing, the reported mentions, existing research and a cursory review of broad data aggregates show that the decline in dynamism hasn’t been isolated to particular industrial sectors and firm sizes.  Here we demonstrated that the decline in entrepreneurship and business dynamism has been nearly universal geographically the last three decades—reaching all fifty states and all but a few metropolitan areas.

Unfortunately the report stops short of finding an underlying cause of why business dynamism and entrepreneurship has been declining and the broader context what can be done about reversing this trend.

Authors of the report, Ina Hathaway of Ennsyte Economics and Robert E. Litan of The Brookings Institution, state this trend needs a more complex analysis of why this is taking place then the report could provide.

Both authors did state, it is clear that these trends fit into a larger narrative of business consolidation occurring in the U.S. economy—whatever the reason, older and larger businesses are doing better relative to younger and smaller ones. Firms and individuals appear to be more risk averse too—businesses are hanging on to cash, fewer people are launching firms, and workers are less likely to switch jobs or move.

It would be interesting to take this report one step further and have a deep comprehensive analysis of what is driving this trend.  Much has been reported, that small businesses and entrepreneurs are having a difficult time in the today’s economy.

Most small businesses do not have a team of lobbyists, attorneys, accountants or afforded access to the power elites in Washington.  

One area to take greater scrutiny would be the U.S. tax code. Both political parties are responsible for the chaotic dysfunction of the U.S. tax code, which if you speak to any small business owner is a job killer in itself.

As a small business owner who recently moved his business from the heavy tax burden state of California to a more business tax friendly state of Florida.  I know all too well the problems of facing and confronting small businesses and entrepreneurs.

Maybe Washington should stop listening to corporate America and starting looking deeper on how they can unleash the entrepreneurial spirit in America before it dies forever.