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Corporate Innovation and the Slowing number of Startups in the USA

Professor John Haltiwanger at the University of Maryland made a shocking claim regarding the formation of new companies. In an interview with NPR he stated,

“It used to be the case, in any given year we were up in the 12, 13 percent range. Now we’re down in the 7 or 8 percent range of a total number of companies down from 12 to 13 percent range historically.”

Slowing Number of StartupsThis is a possible comment on the potential slowing of innovation in the US Economy.  Cautious investment leading to the lack of access to capital is a reason that promising technologies do not see more company startups.  But is this a lack of true innovation?  Many technical innovations are not sufficient to support a full corporation built to develop and market the technology.  Many ‘would be entrepreneurs’ with strong technology have been rejected by the Venture Capital Community as having only a “feature” like solution and not worthy of investment.

Innovation is not stopping at major research universities as technology incubators continue to encourage the development of promising innovation.  The evolving Open Innovation model provides a path to integrate promising external technology with large corporation internal technology to produce breakthrough innovation.  Investment into a university developed technology “feature” by a large corporation may also just enable disruptive innovation.

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