LARGE FIRMS MORE COMPETITIVE
The recent slowdown in business formation is not unique to this area though. Across the United
States, a typical business has tended to get relatively bigger. Larger firms have tended to grow
faster than their smaller competitors. Except for construction, the combined market share of the
largest few firms has expanded considerably in most industries during the past decade. Stand-
alone drugstores have been giving way to national chains and pharmacies inside grocery stores.
Local mom-and-pop stores are facing increased competition from big-box or discount retailers.
Larger firms are not only more cost efficient, but they also have more market power with both
customers and suppliers. Technology and development of global supply chains have risen mar-
ket competition more so for smaller local firms than for larger multinational firms.
AMERICAN DREAM
Because of the contribution of new startups to a region’s long-term growth and competitiveness,
the declining trend of business formation has become a major concern at both the regional and
local levels. Tyler Cowen, an economics professor at George Mason University, offers an alter-
native explanation for this trend. He argues that Americans don’t start businesses as much as
they once did because they have become “lazy,” or complacent with their own status quo along
with relatively high education and income levels, and so on.
One key aspect of entrepreneurship is the financial risk involved in running a business. Ac-
cording to Cowen, “immigrants are the greatest risk takers of all. They are the least complacent
class.” For this reason, he believes immigration reform is key to reviving the quest for the Amer-
ican Dream.
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