Department stores are dying, dragging malls down with them to the grave. Big-box goliaths collapse under their own weight. And those Main Street businesses that for decades large competitors have pounded into dust? They are doing quite well, thank you.
That's according to a new report by the Kauffman Foundation, a nonprofit group that promotes entrepreneurship, released just in time for Small Business Saturday. The news is good for both our national economy and our national character.
This year, Kauffman's Main Street Entrepreneurship Index rebounded to a higher level than indices preceding the recession. Particularly encouraging are the survival rates of small businesses, which are at a three-decade high. The percentage of companies that make it to that magic fifth year rose to 48.7 percent, from 45.9 percent the previous year. By contrast, the proportion of adults owning Main Street companies remained relatively flat, at 60 out of 1,000. So churn appears not to be a major issue.
Of course, some of the good news is a natural function of economic improvement. "The economy plays a very important role in determining Main Street performance," says Jason Wiens, policy director in research and policy at Kauffman. "For instance, the index took a sharp hit after the Great Recession but has been recovering since then. It's now the highest it has been since 1984."
The report also shows that the smallest companies are trending upward. Today businesses with between zero and four employees account for 53.1 percent of Main Street companies. That's a jump from 49.5 percent in 1996.
While women founders have been gaining ground in startups, two-thirds of Main Street owners are men, roughly the same as two decades ago, Kauffman found. Ethnic diversity is more pronounced: 28.3 percent of small business owners are nonwhite, compared with 13.5 percent 20 years ago, with most of the gains among Asians and Latinos.
At 20.6 percent of small-business owners, immigrants are almost twice as well represented as they were 20 years ago. Young owners (ages 30 to 34) are on the decline, while Boomers have increased their share to 28.5 percent.
Overall, the number and survival rates of Main Street companies improved across 47 states and in 38 of the 40 largest metro areas.
Kauffman's research doesn't touch on the effect, for good or for ill, of e-commerce on these companies. But, Wiens suggests, "Internet platforms that connect businesses and consumers may be helping more Main Street firms stay in business."