By James Pethokoukis

“The macroeconomic footprint of the Elons” would probably make for a heckuva movie — certainly a great title — but we’ll have to settle for straightforward economic analysis. Here’s the lede:

Elon Musk is the (co-)founder of Tesla, SpaceX, Neuralink and The Boring Company and was previously involved in firms such as Zip2, PayPal or OpenAI. His current businesses have created an estimated 110,000 jobs and, at the time of writing, Forbes ranked him as the richest person on the planet. Serial entrepreneurs are not limited to the well-known examples such as Elon Musk, Sir Richard Branson or Oprah Winfrey; serial entrepreneurship is widespread.

The analysis comes from economists Sónia Félix (Bank of Portugal), Sudipto Karmakar (Bank of England), and Petr Sedláček (University of Oxford). Some key points:

• Startups are important: “Seemingly small changes to the numbers and growth potential of startups may leave large and persistent footprints on the aggregate economy.”

• Serial entrepreneurship — the simultaneous ownership of multiple businesses — is important to business success: “We find that firms of serial entrepreneurs are about 60% larger, roughly 25% less likely to shut down, grow about 35% faster, and are 34% more productive compared to regular firms.”

• These serial entrepreneurship companies also have a big economic impact: “We also document that this group of businesses alone accounts for more than one-third of aggregate job creation and productivity growth. Given that they represent less than one-fifth of all businesses, these values further underscore their superior performance and importance for the aggregate economy.”

• The entrepreneurs themselves are good at running businesses: I’m going a bit longer here:

Comparing the performance of the first businesses of serial entrepreneurs, their subsequent businesses, and regular firms allows us to gauge the extent to which the superior performance of serial-entrepreneur firms relative to regular businesses is present from the onset (i.e. also for first firms of serial entrepreneurs) or develops only gradually over time (i.e. only for subsequent firms of serial entrepreneurs). In our data, we observe that the first and subsequent businesses of serial entrepreneurs have very similar dynamics, substantially outperforming regular businesses. Our results, therefore, point to (selection on) ex-ante heterogeneity as a key source of serial entrepreneurs’ success, rather than learning or favourable ex-post shocks.

• Serial entrepreneurs play a big role in income inequality: “Our results suggest that, although serial entrepreneurs represent fewer than 3% of all business owners, they account for 10–20% of top income inequality.”

Look, if people starting lots of successful businesses with big economic impacts allows them to not only get rich but have a sustained period of high-income generation, then that’s about a fifth of income inequality we don’t need to worry much about.

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