As the political landscape shifts with a Trump-Musk administration, one of the most immediate and profound impacts will be a reduction in government waste. With billions in governmental inefficiencies expected to be curtailed, the ripple effects will extend beyond budget savings to job losses, particularly in government and social services. Given that government and social services have been two of the largest job growth sectors in the past five years, this shift raises an urgent question: Where will the new jobs come from?

The U.S. labor market has long relied on private-sector innovation to drive job creation, particularly in the entrepreneurial sector. Over the past year, the S&P 500, representing approximately 28.3 million jobs, has experienced a net job loss of 48,000. However, within this group, a subset of 45 entrepreneurial companies created 64,000 jobs, meaning that the remaining 455 companies collectively shed 122,000 jobs. This trend underscores a crucial reality: Without the growth driven by entrepreneurial companies, job losses in large, established firms would be even more pronounced.

Further complicating the employment landscape is the ongoing trend of job outsourcing. Many large corporations, despite reporting employment growth, are expanding their workforces overseas rather than within the United States. Take Accenture, for example. The consulting giant, once a U.S.-based firm and now headquartered in Ireland, has expanded its workforce from 624,000 to 799,000 employees over the past three years. With operations in more than 120 countries, it is likely that few of these new jobs have been created domestically. As outsourcing accelerates, the U.S. faces an increasingly precarious employment outlook unless substantial policy and economic shifts are implemented.

The economic data reveals a stark contrast between entrepreneurial firms and their larger, bureaucratic counterparts. Over the past two years:

• Entrepreneurial firms in the S&P 500 grew revenues from $1.2 trillion to $1.6 trillion, a 32% increase, while non-entrepreneurial firms saw revenues stagnate, slipping from $11.58 trillion to $11.56 trillion (-0.2%).
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for entrepreneurial firms surged 55% from $252 billion to $391 billion, while non-entrepreneurial firms eked out just a 1.5% increase, from $2.185 trillion to $2.222 trillion.
• Market capitalization for entrepreneurial firms skyrocketed 220%, from $4.2 trillion to $13.4 trillion, while non-entrepreneurial firms experienced a more modest 21.3% gain, from $23 trillion to $29.2 trillion.

These differences highlight a powerful reality: The backbone of U.S. economic growth lies in entrepreneurial innovation. As government and social service jobs decline, the need for job creation shifts squarely to high-growth, innovative companies. This presents both an economic imperative and an investment opportunity—entrepreneurial companies not only create more jobs but also drive superior revenue, profit, and stock market performance.

So how do we support this vital sector? The key lies in ensuring that these high-growth companies have the capital they need to expand. With the new administration poised to champion business-friendly policies—potentially through mechanisms like a sovereign wealth fund—there is a clear opportunity to fuel entrepreneurial expansion. However, waiting for traditional S&P 500 corporations to lead the charge is not a viable strategy. Their bureaucratic structures and slow-growth models suggest they will continue their pattern of stagnation.

Ultimately, for America to maintain its competitive edge in the global economy, it must double down on fostering entrepreneurship. Job growth, economic expansion, and investment returns will hinge on supporting these dynamic firms, which have proven time and again that they are the engines of innovation and prosperity.