Andreas Widmer, director, entrepreneurship, published an essay on economic freedom with the Heritage Foundation.
The United States continues to decline in economic freedom as defined by The Heritage Foundation’s annual Index of Economic Freedom,1even as the world as a whole improves ever so slightly. How can it be that the “leader of the free world” is no longer leading in freedom? Perhaps because policymakers have lost sight of how to encourage and incentivize the kind of economic activity that best contributes to both prosperity and human freedom.
The decline of small and medium-sized corporations (SMEs) tells the tale. SMEs are the engines of any economy. They account for 99.7 percent of our total number of companies.2 Since 1990, big business has eliminated 4 million jobs, but small businesses have added 8 million.3 More than 50 percent of the working population (120 million individuals) works in small businesses.4 SMEs are responsible for 46 percent of our GDP 5 and produce 16 times as many patents per employee as large patenting firms produce.6
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