360° Coverage : Opportunity, Not Necessity, Drives More U.S. Startups

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Opportunity, Not Necessity, Drives More U.S. Startups

Apr 13 2014, 6:53pm CDT | by

Recessions tend to drive people to entrepreneurship. Those who might never consider starting a business will do so if they can’t get a job. As our economy gets stronger, a smaller percentage of the...

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15 weeks ago

Opportunity, Not Necessity, Drives More U.S. Startups

Apr 13 2014, 6:53pm CDT | by

Recessions tend to drive people to entrepreneurship. Those who might never consider starting a business will do so if they can’t get a job.

As our economy gets stronger, a smaller percentage of the population is starting businesses, according to the Kauffman Foundation’s Index of Entrepreneurial Activity, released a few days ago. Last year, .28 percent of American adults started their own businesses each month, compared to .30 percent in 2012.

That means the percentage of startup founders among us declined from 300 out of 100,000 adults to 280 out of 100,000. Healthier labor market conditions mean fewer people are starting businesses out of necessity, according to the findings. A dip in new business creation by men, who start more businesses in general, was responsible for much of the decline.

What’s significant, according to the researchers, is that the numbers have returned to pre-recession levels. The last time Kauffman found that the overall rate of entrepreneurial activity dipped below .30 was in 2006, when the percentage was .29. Rates have ticked downward across all racial and ethnic groups since last year.

Also interesting is the fact that people who did start businesses in 2013 were more driven by opportunity–rather than necessity–than in recent years. The percentage of those who were previously unemployed declined. In 2013, 78.2% were not starting a business immediately following unemployment, vs. 73.8% in 2009.

So who are the people creating businesses right now?

* Many are seasoned pros. Kauffman found that the number of people ages 55 to 64 who are starting businesses is on the upswing. In 2003, 18.7 percent of all entrepreneurs fell into this age group. By 2013, the percentage hit 23.4 percent. People ages 45 to 54 also represent a rising share of entrepreneurs. In 2003, 25.2% of entrepreneurs were in this age range. By last year, 30 percent of entrepreneurs were 45 to 54. The researchers attribute this growth to the aging of the population.

* Immigrants are almost twice as likely to launch a new business than people born in the U.S., with the entrepreneurship rate among immigrants now at .43 percent.

* People with lower levels of education have higher entrepreneurship rates, perhaps because they have fewer opportunities to get a traditional job, according to the research. People who did not complete high school had an entrepreneurship rate of .48 percent in 2013. In contrast, the rate of entrepreneurial activity was .28 percent among high school graduates and .30 percent among college graduates.

* The construction industry, which took a massive hit during the recession, has made a comeback. This industry had the highest rate of entrepreneurial activity.

* The West has the highest entrepreneurship rates. Montana has the highest rate of startup activity among all states, with 610 out of every 100,000 adults starting a new business each month.

* San Francisco is the most entrepreneurial major metropolitan area, with .57 percent of the adult population involved in startup activity in 2013.

Most of us want to have a choice as to the type of work we do and to determine if it is best for us to work for someone else or for ourselves. Based on Kaufman’s data, it looks like more people have the freedom to decide. That bodes well for the future. It is a lot easier to succeed in a new business if you want to be running it in the first place–and aren’t forced into it because it is the only way to pay the bills.

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

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Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into b ...
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Update
8

7 weeks ago

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KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rej ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

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Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ i ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

8 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Min ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

8 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving a ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

8 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 20 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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