Entrepreneurs play a critical role in the American economy. The new businesses they launch provide new goods and services. They also provide existing goods and services more efficiently, forcing incumbents to do a better job through competition. And while most media attention seems devoted to potentially high-impact technology startups, regular “mom and pop” businesses can be important mechanisms for upward mobility. We want a dynamic economy where labor and capital can be employed as productively as possible. Entrepreneurship plays a big role in making that happen.

It remains to be seen how entrepreneurs navigate the post-pandemic economy. But before the coronavirus outbreak, there were several disturbing long-term trends about America’s startup superpower. Among them: New businesses have become a smaller share of all companies than they used to be, as well as their share of total employment. These trends are illustrated in “Federal Policies in Response to Declining Entrepreneurship,” a new Congressional Budget Office report on the subject: