America is in the midst of an extraordinary startup boom

Pdigging, that’s it said, represent purity. Perhaps they will soon stand for something else: business dynamics. In Greenville, South Carolina, two locals have created earrings that look like jewelry but contain a cluster of microelectronics to track the wearer’s body temperature, heart rate, and even menstrual cycle. Incora Health was founded in 2022. It plans to start selling its earrings, which are currently in clinical trials, in a few months. “We are the first small-town founders trying to change women’s health care, and that’s not lost on us,” said Theresa Gevaert, co-founder. But the bold young company is part of a wave of startups launching in America in recent years. Many will fail. Some will succeed. Together they suggest that profound changes are afoot.

America has a deserved reputation as a country at the forefront of innovation, fueled by an entrepreneurial spirit. But in recent years, some economists have become concerned that this reputation no longer holds up. Startups have made up an increasingly smaller part of the business landscape: In 1982, about 38% of U.S. companies were less than five years old; in 2018, 29% were this young. The share of Americans working for startups also fell. Silicon Valley was bustling with high-tech wizardry, but the giant corporations hoarded the best researchers, leading to a slower spread of new ideas across the country. Researchers, including at the Federal Reserve, pointed to this decline in momentum as one of the main causes of weaker productivity growth.