Your statement confuses me. Where did all the existing businesses come from if 'people' did not start them in first place? The costs of starting a new business might be dropping considerably, but this hardly the first time in history that entrepreneurs were being so greatly rewarded.
Might be worth pointing out that before the rise of manufacturing in large scale with assembly lines &c casual work was normal. Not much in the way of benefits or security.
Compared to older times it has become easier to startup(especially internet and mobile) because of maturity and agility of technologies, a huge rush in incubators like ycombinator. Also guys outside the silicon valley can look forward to more probability of success than before as the investor and hacker networks are slowly building up.
It has accelerated considerably in the last 10 years, though. I was in grad school in 1999-2000, I started putting my apps on the web, but the infrastructure wasn't quite as sophisticated or inexpensive as it is now. I considered my apps "demos" to show interested people and hopefully gain some interest, but not something that could be "real".
In retrospect, I realize now that they absolutely could have been "real", I just didn't quite get it. This simple realization is also a huge factor, and more young people seem to be realizing it than ever before. I remember pg pointed out in an essay that when you open the cage door to an animal that has been in captivity for a long time, it takes a while for it to realize it can come and go.
I'd say both technology and pure social adjustment to change have both been factors in the last 10 years. While I could have gotten server space and made my apps real in 2000 (and plenty of people certainly did!), it is easier now from a technical and cost perspective than it was a 10-15 years ago.
But the biggest change may be social and just have a lot to do with latency - a higher percentage of young graduate people with very little to lose are now aware that they don't need permission to create and release an app simply because it takes a while for social patterns to shift after a technical breakthrough (and this sort of thing can spread like a (benign!) virus, really picking up steam). This, combined with a considerable drop in price and increase of availability, could qualify a kind of paradigm shift, even if the technology has only changed by degree.
I agree. I made my first "mobile app" in 2002 - a cell phone remote control for Winamp - but there was no obvious route to monetization at the time, so I gave it away for free. Today, competition notwithstanding, I could just throw it up on an app store, and watch the purchases roll in.
the capital required to start a profitable business is orders of magnitude lower than ever before.
Disagree. It's cheaper than it was in 1997 or 1967, sure, but I don't think it's cheaper than "ever before". For one thing, time is becoming more expensive, if one looks at costs like rent, health insurance, long-term career opportunity cost, and business risk (competitors advancing, unexpected change) imposed by the passage of time. Desirable real estate is insanely expensive, and that drives up everything, especially the cost of hiring people. Cities in which VC is an option are especially expensive: rent alone is more than many people make after taxes.
It's easier to build a CRUD-app than a chip factory, for sure, but I don't think that's a fair comparison. The right comparison might be a restaurant or a gas station in an area with extremely low real estate costs and regulatory overhead... in a time like 1928, when startup costs for brick-and-mortar businesses were very low by today's standards.
The percentage of people who can reliably start a business at scale X for various values of X has changed, but not a whole lot, over the past 100 years. What has changed in the scale range for internet businesses; businesses at smaller X's can now be delivered over the internet, which wasn't the case 20 years ago.
It's hardly the first time, but while there has long been a path to starting a restaurant with a bank loan it's been harder to get a software company off the ground.
For the first time in the history of civilization, people are starting their own business.