Despite Mark Zuckerberg's astounding success building Facebook (FB - News) into the world's biggest social network, entrepreneurial activity in the U.S. is showing signs of deterioration, from startups to the self-employed.

High-flying Internet newcomers grab headlines, but most entrepreneurs are in more conventional fields like construction and professional services. As a group lately, they appear less healthy and less likely to boost hiring.

The number of startups with a payroll is the smallest in decades, and businesses staffed only by the owner are investing even less than in prior years.

"People are starting businesses that aren't the kinds of businesses that are very substantial," said Scott Shane, an economics professor at Case Western Reserve University.

The recession shrank the number of firms comprising only the owner, but there's a long-term shift toward non-employer companies. They are now about 80% of all businesses, up from three-quarters in the early 1990s, Shane says. On average, they generate smaller sales and invest less than they did more than 10 years ago.

The number of new businesses with employees is falling even faster than one-person outfits. Establishments less than a year old, including those belonging to the same firm, totaled 556,553 in 2010, according to the latest Commerce Department data. That's down 26% from the peak of 747,278 in 2006, and the lowest level since 1983, despite a 46% increase in the total number of establishments since then.

Previous post-recession recoveries showed sharp increases, reinforcing a long-held belief that the end of a recession is a good time to start a company.

Startups are also smaller now than in prior years, further eroding the jobs boost from new businesses. Some of that reflects ongoing trends, such as the evolution toward a more service-based economy and tech-powered productivity gains. But the decline could also be a symptom of less robust entrepreneurial activity.

Businesses that start small tend to stay small, and the recession has sent people into self-employment holding patterns with less likelihood of growth, says E.J. Reedy, a research fellow at the Ewing Marion Kauffman Foundation.

"The new businesses that are starting are a little bit less healthy," he said.

New Firms Light On Staff

By various measures, startups' staffing has been trending lower for more than 10 years. Average employees at new establishments dropped from 10.8 workers in 2002 to 7.7 in 2010, according to Commerce Department data.

The booming mobile apps market has given rise to one-person companies consisting of a lone programmer, notes William Dunkelberg, chief economist at the National Federation of Independent Business. He attributes the trend mostly to technology.

"If you're writing code for apps, you don't need a lot of help," he said.

Technology has also reduced the need for staff for record keeping, administration and accounting, he adds. The housing bust is a factor too, by reducing demand for strip mall merchants, restaurants and retailers.

"We're still coming back from that major adjustment period," Dunkelberg said.

But Shane sees a rising failure rate among the self-employed and is troubled by the shift toward non-employers, which he considers qualitatively different from firms that employ people.

Capital investment by non-employers on average has fallen to about $3,500 a year from $6,400 in 1996, while employer companies invest more than $180,000.

"These numbers don't really look like they're driven by productivity," he said.