Sunday, October 1, 2023

US entrepreneurship accelerates

Must read

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

More Americans are turning their brainstorms into businesses.

The total entrepreneurial activity rate, which measures the percentage of new and existing business ownership, was 16.5% in 2021, up from 15.4% in 2020, the Report Global Entrepreneurship Monitor 2021/2022 by Babson College and a consortium of academic institutions.

More than half of entrepreneurs start a business in professional services and technology, the report shows. Other hot areas include finance, real estate and business services (28%) and education, government, social services and consumer services (21%).

Most established entrepreneurs in the report are solo operators or small business owners with five employees or fewer.

“What we know about entrepreneurship is that you can get started with very few resources,” said Donna Kelley, a professor of entrepreneurship at Babson College. “You can use what you have.”

Many entrepreneurs are optimistic. 43% of entrepreneurs with an established business said they expect more growth than the year before. 52% of entrepreneurs said the pandemic alerted them to new avenues to pursue in their business.

And if the report is any indicator, the future of our economy and careers will be one that is heavily driven by entrepreneurship. Some key findings:

· The youngest generation of employees is diving into entrepreneurship. 19% of 18-24 year olds are entrepreneurship and 20% had high entrepreneurial intentions. “There is a lot more visibility around entrepreneurship and there are a lot more educational programs,” Kelley says. However, their business closure rates are high – 6.2%.

· Women choose a career as an entrepreneur. 78% of women think it is a good career choice, compared to 75% of men. However, only 58% of women believe it is easy to start a business, compared to 69% of men. Interestingly, women’s performance anxiety, usually higher than men’s, has decreased. 43.4% of the women reported performance anxiety, compared to 41.8% of the men.

· Black Americans embrace entrepreneurship. 81% of black Americans say entrepreneurship is a good career choice; 32% are entrepreneurs – about 2.5x the rate for white counterparts. 23% of black Americans have entrepreneurial intentions.

· They are focused on their impact. 68% of entrepreneurs say they prioritize the social and environmental impact of their business. 49% said they have acted in the past year to minimize their company’s environmental impact, and 50% said they have taken action to maximize their social outcomes.

· They are going digital. In addition to a third of business owners already using digital technologies in their business, another fourth have adopted or improved these technologies.

However, there was also an increase in company closures. The closing rate of 4.3% was the highest in the 23-year history of the GEM report.

“Covid may have accelerated the closure of businesses that were underperforming and unable to adapt to a changed environment,” Kelley said.

Black and Hispanic entrepreneurs, who have faced barriers to accessing capital in the past, were more likely to close their businesses (6.2%) than whites (3.2%).

However, closure does not always mean failure, especially in the post-pandemic environment, where people are rethinking their lives’ priorities. Sometimes people choose to close a business to take a job, pursue another business, or change their lifestyle. “It’s more than just financial,” Kelley says.

More articles

Latest article