According to a new working paper from the National Bureau of Economics, the number of American firms listed publicly in the U.S. has dropped more than half. In 1997, more than 7,500 American firms were listed publicly in the U.S. Nearly two decades later, in 2016, the number had dropped to 3,618 firms. Quartz reports: The crux of the issue is that U.S. startups are increasingly shunning stock market boards. That could have worrying implications for America's long-term economic prospects. One big reason young companies are shying away from IPOs is that public listings don't offer much benefit to promising startups, say the paper's authors, economists Craig Doidge, Kathleen Kahle, Andrew Karolyi, and Rene Stulz. In fact, going public can hurt them. The upside of public listing is that it lets companies raise huge sums of capital, issue more shares, issue debt with relative ease, and use equity to fund acquisitions. But because of the ways the American economy has evolved, those advantages are less important than they once were.
When industry powered U.S. growth, companies grew by spending on capital investments like factories and machinery. Back in 1975, firms once spent six times more on capital investments than they did on research and development. But as the U.S. shifted toward a services and knowledge-based economy, intangible investments became increasingly important. In 2002, R&D expenditures for the average firm surpassed capital expenditures for the first time. It's stayed that way since; nowadays, average R&D spending is roughly twice that of capital expenditures. The problem is, two features of public listings -- disclosure and accounting standards -- make things tough on companies with more intangible assets. U.S. securities law requires companies to disclose their activities in detail. But startups are wary of sharing information that might benefit their compe ors.
We touched on the issue of how the stock market has gone from funding companies for the long term into a make a quick buck now system. The focus on next quarter vs the long view, and I think we're going to see more of this. It's unfortunate because it actually does hinder economic growth.
"R&D expenditures for the average firm surpassed capital expenditures for the first time"
Fed R&D, esp in energy, has been strong, but of course, the oligarchy/Repugs intend to "pay for" enriching the oligarchy by cutting govt spending, incluidng R&D.
note the drop or stagnation in Fed R&D when Repugs control spending.
So the article sayes R&D is down but exceeds capital expenditures, but R&D is also going down.
Will capital goods expenditure e after the tax cut, or will the oligarchy pocket the tax expenditures and continue to starve R&D (and employees)?
If you're Capital, where will you get the best ROI? In capital goods? or in BigFinance's casino?
(or in tax aversion and tax evasion?)
How about investing in people?
There are 2.4 million fewer college students than there were five years ago
http://hechingerreport.org/2-4-milli...ive-years-ago/
iow, America is ed by the predatory oligarchy hoarding wealth (increasing inequality), and is un able.
More on (relative) US R&D
The Death of American Research and Development
http://fortune.com/2015/12/21/death-...d-development/
I deal with a company, Farmers Business Network, that has raised a huge amount of money through different rounds of investing. They are quite large imo now and would definitely fit the party of having intangible assests. The CEO talks about an IPO in the next couple of years and I don't see what's the point of it. Either there's a new aspect of the business they are looking at our, imo, it may very well be a "I made it" sign off the startup world.
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