Entrepreneurial Growth in United States Consistent, Foreign-Born Start-Up Businesses Increasing, Report Finds

Entrepreneurial Growth in United States Consistent, Foreign-Born Start-Up Businesses Increasing, Report Finds

While the rate of entrepreneurial activity in the United States has remained remarkably consistent over the past decade, subtle year-to-year shifts in the gender, demographic, geographic, and ethnic make-up of the adult population are changing the face of the American entrepreneur, a new report from the Ewing Marion Kauffman Foundation finds.

According to the Kauffman Index of Entrepreneurial Activity, which uses data from the monthly Current Population Survey to measure business start-up activity for the adult population of the United States at the individual owner level, 465,000 people on average create new businesses each month. The survey also found that Asians, Latinos, and immigrants far outpaced native-born Americans in entrepreneurial activity last year, while African Americans experienced a decline. In addition, entrepreneurial activity for men did not change between 2005-06, ending a downward trend that began in 2003, while the rate of entrepreneurial activity for women decreased slightly.

Looking at regional and state-based trends, the Midwest had the lowest level of entrepreneurial activity of any region for the first time in the past eleven years, replacing the Northeast, which had posted the lowest rates every year from 1996 to 2005. The five states with the highest rates of entrepreneurial activity were Montana, Mississippi, Georgia, Oklahoma, and Maine, while the five states with the lowest rates were Michigan, Pennsylvania, South Carolina, Illinois, and Delaware.

"The United States continues to be a very entrepreneurial nation," said Kauffman Foundation president and CEO Carl Schramm. "The large portion of entrepreneurial firms and the significant number of jobs created by smaller, newer, and growing firms in America are a strong indication that the entrepreneurial sector, with its flexibility and capacity to adapt quickly, is poised to become an even more important factor in our nation's economic growth."