Entrepreneurship Remained Strong in 2008, Report Finds
Entrepreneurship Remained Strong in 2008, Report Finds
New business creation rates increased slightly in the United States between 2007 and 2008, with entrepreneurship rates among immigrants, women, and older Americans all up, a new report from the Ewing Marion Kauffman Foundation finds.
Based on monthly Current Population Survey data, the annual Kauffman Index of Entrepreneurial Activity (36 pages, PDF) found that in 2008 an average of 0.32 percent of the adult population (320 out of 100,000 adults) created a new business each month — the equivalent of some 530,000 new businesses — compared to an average of 0.30 percent in 2007. At the same time, the study found that the entrepreneurship rate increased only for low-income types of businesses, which may be an early indicator of how the recession is affecting business formation.
While entrepreneurial activity has remained generally consistent over the past decade, the study highlights significant shifts in the demographic and geographic composition of new entrepreneurs. For instance, 2008 saw significant year-over-year increases in business creation among adults between the ages of 55 and 64, Latinos, immigrants, and Asian Americans. With the exception of the Midwest, all regions saw increased entrepreneurial activity in 2008, while business creation increased among both men and women.
"The overall pace of entrepreneurial activity did not suffer during the recession in 2008, which is great news," said Kauffman Foundation vice president of research and policy Robert Litan. "This is consistent with historical patterns, to the extent we understand them, which indicate that entrepreneurial activity is largely insensitive to the economic cycle. So far, at least through 2008, this pattern is holding up."
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