The Kauffman Foundation has worked closely with the Census Bureau and other government agencies to create and publish an Annual Survey of Entrepreneurs (ASE), which offers economists a snapshot of American business growth and practices.
Perhaps most surprising, the 2015 ASE revealed that new and young firms are the primary sources of net job creation in the U.S. – not small or big companies as is often cited.
According to Dane Strangler, VP of Research and Policy at Kauffman, “The magnitude of the mindset shift that this prompted … is hard to overestimate.”
Other findings of the Kauffman Foundation’s 2015 ASE:
- Startup activity rates, gender, ethnicity: The Startup Activity Index rose for the first time in five years, the largest year-over-year increase from the past two decades. This indicates that startup entrepreneurial recovery remains below historical trends. By gender, males comprised 63.2% of all new entrepreneurial activity, with females sparking 36.3% of new businesses. This is a definite decrease for women, since they accounted for 43.7% of new entrepreneurs in 1996. However, females are more often opportunistic than “necessity” entrepreneurs – 84.1% of the women did not come from unemployment rolls, which bested males hard hit by the recession.
- Diversity, Military Status: Good news here for minorities: more than 40% of new entrepreneurs were non-white, with most of the rise attributed to Latino and Asian sectors. Immigrants accounted for 28.5% of new entrepreneurs, up from 13.3% in 1996. Meanwhile, the rate of veterans starting businesses fell nearly 50% between 1996 and 2014, with only 5.6% of new businesses started by veterans during the last business census round.
- Ages of new entrepreneurs: The survey accounted for four age sectors, which were fairly even in representation. People ages 20-34 started 24.7% of new businesses, compared to 22.9% of startups in the 35-44 ages bracket. Those who were 45-54 accounted for 26.6% of new business starts. People aged 55-64 started 25.8% of the businesses, which shows a definite Boomer hike over the 1996 report showing only 14.8% of new businesses started by people of those ages. Back then, younger people were the most entrepreneurial with 34.3% starting businesses between the ages of 20 and 34.
- Education: People start businesses for all sorts of personal reasons, and educational level is not as tied to success statistics as closely other factors such as capitalization, industry experience, management experience or commitment. Therefore, it’s not unexpected that 15.1% of emerging entrepreneurs lack a high school diploma. College graduation (33%) is still considered a plus, though 22.5% started businesses without completing their college degree.
What we are seeing in America is a slow resurgence of business startups following a very long financial recovery period. However, start-up activity offers only one snapshot of economic recovery. For example, while women trailed in the start-up arena, they enjoyed a 32% growth in the area of middle-market firms. Since that sector only increased by 4% overall between 2008 and 2014, the 32% rise in the number of female-led firms is significant. And that’s the way it is with statistics; they provide an overview but every single business owner makes a unique contribution to the prosperity of our nation.