Why does this matter? New firms are the “creative” part of creative destruction. They help keep the economy in a constant state of rebirth, serving to replace dying industries, foster competition with incumbent companies, and produce new, higher wage jobs. When they disappear, the cycle of creative destruction falls out of balance. That is the core economic problem America faces today.

In short, we’ve lost the economic dynamism that powered U.S. prosperity for the past century.

No matter how you measure it, dynamism is fading from the map. As a result, we now have more inequality in and among our communities, lower wages for our workers, and less competition in our markets.

The Great Recession marked a historic turning point for the creation of new businesses.

Something jarring occurred with the onset of the Great Recession which threw the cycle of creation in the economy dramatically out of balance. For the first time, the United States experienced a collapse in new business creation so severe that companies were dying faster than they were being born.

Annual difference between firm births and deaths in the U.S. economy

The number of businesses being added to the economy has ground to a halt over time. During the recovery period from 2010 to 2014, the economy added just over 100,000 firms. Compare that to a prior era—the recovery from 1983 to 1987—when the size of the national economy was much smaller than it is today and the United States generated an increase of nearly half a million new businesses.

Declining dynamism is a driving force behind regional inequality.

It’s not simply that the rate and number of new businesses is declining; the preponderance of business creation is now intensely concentrated in a handful of metropolitan hubs that have managed to maintained resiliency amidst the national slowdown. We are now seeing historically low levels of new companies being born in many corners of America—from the industrial Midwest to the rural South to the urban centers of the Northeast.

From 2010 to 2014, five metro areas—New York, Miami, Los Angeles, Houston, and Dallas—produced as big of an increase in businesses as the rest of the nation combined.

The metro areas powering the national increase in firms over four recent expansions