Kauffman Foundation News (3/28/11): Kauffman Paper Evaluates Financial Industry’s Effect on Entrepreneurship
Expanding Financial Sector Depleting Pool of
Potential High-Growth Company Founders
The expansion of the financial sector over the past few decades shifted the flow of capital toward financial assets, creating inefficiencies that had material economic impacts, according to “Financialization and Its Entrepreneurial Consequences,” a study the Ewing Marion Kauffman Foundation released today.
One of those impacts may have been the financial industry’s effect on entrepreneurship. Although widespread entrepreneurial capitalism requires a significant and active financial services sector, the industry’s growing size potentially suppressed entrepreneurship as financial services and young companies compete for many of the same employees.