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For the first time on record, U.S. companies are actually dying at a faster rate than they're being born, according to an analysis by the Economic Innovation Group, a non-profit research and advocacy organization.

Why it matters: The slow rate of business starts means the U.S. economy is powered by a narrowing segment of companies, people and geographies — making the overall economy less resilient than it was after previous recessions. When fewer new companies are being born, it's less likely that the companies and jobs that are disappearing will be replaced by better ones. And without competitive pressures from upstarts, big companies are able to grow bigger faster, increasing industry consolidation.

Expand chart
Data: Census Bureau; Chart: Chris Canipe / Axios

"This is new territory for the U.S. economy," said John Lettieri, co-founder of EIG. "Firms that don't get created don't create jobs...The ripple effects are really hard to overstate."The birth rate of new companies collapsed with the Great Recession, and the number of firms that opened during the recovery period is lower than that of any other post-recession period.

The U.S. economy is increasingly reliant on a few metropolitan areas' expansion of companies. Between 2010 and 2014, five metro areas produced the same net increase in firms as the entire rest of the country:

  1. New York
  2. Miami
  3. Los Angeles
  4. Houston
  5. Dallas

Essentially, this means that the number of markets with expanding bases of new companies are dwindling down to a few "hubs," a big departure from the previous three decades when almost all U.S. metro areas consistently created more than enough new companies to replace the ones that closed. In the 1970s, more than one-third of metro areas met or exceeded the national startup rate. By the 2010s, only one in seven metro areas matches or exceeds the national startup rate.

What it means for communities: Areas where a lot of new companies are created tend to enjoy the benefits of stronger local economies, including opportunities to switch jobs, move between regions and earn higher salaries. Fewer communities are now experiencing those benefits, helping to fuel regional inequality, according to EIG. Already-disadvantaged areas seem to suffer the most from the startup slowdown, while thriving areas (typically centered around bigger cities) continued to grow more prosperous.

What happened? EIG suggests declining population growth, a sharp decline in startup capital (notably home equity) during the recession, and changes to the regulatory environment have been factors. The group's full analysis can be found here.

Be smart: This plays into the growing gaps we see across the country between the haves and have-nots, the urban and rural areas — and even political views.

Go deeper

Updated 1 hour ago - Politics & Policy

Bipartisan tributes flood in for "giant of the Senate" Bob Dole

Then-Vice President Joe Biden and former Sen. Bob Dole at an event put on by the World Food Program where he was awarded the first “McGovern-Dole Leadership Award” in December 2013. Photo: Douglas Graham/CQ Roll Call

Republican and Democratic politicians, including former Senate colleagues, are sharing condolences and memories commemorating the life of Bob Dole, who passed away at 98 on Sunday morning.

The big picture: Dole, the Republican presidential nominee in 1996, was the longest serving Republican leader in the Senate until 2018, when current Senate Minority Leader Mitch McConnell surpassed his record,

Former Sen. Bob Dole dies

Former Sen. Bob Dole in 2019. Photo: Tom Brenner/Getty Images

Former Kansas Sen. Bob Dole passed away Sunday morning at the age of 98, the Elizabeth Dole Foundation announced in a statement.

Driving the news: Dole, a revered figure in U.S. politics and the Republican presidential nominee in 1996, served in the Senate for 27 years, including 11 years as GOP leader. Earlier this year he revealed he had been diagnosed with stage 4 lung cancer.

Movie theaters go out of style

Illustration: Sarah Grillo/Axios

Vaccination rates are going up, people are going out to restaurants again — although the new COVID variant may get in the way — but they still aren't rushing back to the movies.

By the numbers: Some 49% of pre-pandemic moviegoers are no longer hitting theaters, according to a study from the film research company The Quorum, as reported by the New York Times.