A new study by Babson College and Baruch College reveals that U.S. entrepreneurship rates have climbed to their highest level in more than a decade.
According to the 2012 Global Entrepreneurship Monitor (GEM) U.S. Report, the average Total Early-Stage Entrepreneurial Activity rate (TEA) increased to nearly 13 percent, an all-time high since GEM first began tracking entrepreneurship rates in 1999.
This unique entrepreneurship research, conducted in 69 economies worldwide, surveys individuals rather than firm registrations, analyzing how many individuals are participating in entrepreneurship, the types of businesses they are starting or operating, their attitudes about entrepreneurship and the challenges they face in starting and growing their businesses.
“Despite a sluggish economy, 2012 was marked by U.S. entrepreneurs reporting greater optimism and confidence in their abilities to start new businesses,” commented the GEM Report’s lead author, Donna J. Kelley, Associate Professor of Entrepreneurship at Babson College. “In fact, nearly 13 percent of the U.S. adult population was engaged in entrepreneurship with the vast majority starting businesses to pursue an opportunity rather than out of necessity. On the downside, Americans closing businesses were twice as likely as those in other innovation-driven economies to cite difficulties financing their ventures.”
“We found that entrepreneurs in the U.S. exhibited a type of closeness,” commented Abdul Ali, Associate Professor of Entrepreneurship at Babson and one of the report authors. “More than two-thirds start at home, over 80 percent fund their efforts from personal, family, and friend sources and many employ family, nonpaid workers, and part-timers. Further, little more than one-tenth make a significant portion of their sales from foreign customers. While this may demonstrate an ease of getting started in the United States, entrepreneurs with expansive ambitions are required in order to make a contribution to job growth and global competitiveness.”