On this National Startup Across America Day, the Small Business & Entrepreneurship Council released its third "Gap Analysis" report, which points to an estimated gap or shortfall of between 867,000 and 4.8 million businesses in the U.S. economy.

The report – Gap Analysis #3 - Entrepreneurship in Decline: Millions of Missing Businesses – looks at how various measures of entrepreneurship and business activity show a decline in entrepreneurship and startup activity over at least the past eight or so years.

SBE Council chief economist Raymond J. Keating explained, "If we look at incorporated and unincorporated self-employed, and employer firms as shares of the relevant population, we see a significant gap in the number of businesses compared to where we should be. Indeed, these numbers point to some 3.7 million missing businesses in the U.S. in 2015."

Keating added, "Looking at IRS data that offers the broadest measure of businesses in the U.S., if the previous growth in the business share of the relevant population had continued after 2008, the number of missing businesses in 2015 rises to 4.8 million."

Noting that this is National Startup Day, Keating also observed, "If the recent pre-recession percentage high as a share of the relevant population had prevailed in 2015, there would have been approximately 106,000 more startups than there were in that year."

In the report, Keating summed up, "Starting up, building and operating businesses are central to a nation's economic well-being. After all, entrepreneurship is the source of innovation, economic growth, wage growth and job creation, today and in the future."

SBE Council president & CEO Karen Kerrigan added, "As members of Congress celebrate Startup Day across their districts and states today, we hope they bring that spirit and energy back to Washington to advance policies that will encourage more entrepreneurship and small business growth. This would include policies that will improve capital access, and a tax and regulatory system that is less burdensome, costly and complex for small businesses." 

The results in this third SBE Council "Gap Analysis" line up with the findings in the first two reports. The first analysis – Gap Analysis #1: The GDP Shortfall - estimated a GDP shortfall of $2.7 trillion (in 2009 dollars) in 2016 due to real GDP growth running at less than half the rate it should during a recovery/expansion period. The second report – Gap Analysis #2: Lost Decade of Private Investment – revealed a historic gap or shortfall in private-sector investment over the most recent decade, for example, with real fixed nonresidential investment (or business investment) coming up $1.1 trillion (in 2009 dollars) short of where it should be in 2016.