There’s good news about entrepreneurship in the United States: It's on the rise. According to the just released 2014 Global Entrepreneurship Monitor (GEM) from Babson College, 14 percent of Americans were involved in starting or running a new business last year. That's the highest rate of entrepreneurship the Monitor has recorded since 1999—the height of the dotcom boom.
Americans seem to have recovered from their recession-driven fears that caused the rate of new business startups to take a nosedive in recent years—12 percent of those surveyed plan to start a new business.
More than other countries in the global survey, Americans actually make good on their intentions to start businesses. What do U.S. startups look like?
- They're predominantly male: 17 percent of men, but just 11 percent of women are involved in startups. Lack of confidence may be a factor here. More than 50 percent of both men and women say that they see ideas for startups all around them. However, only 46 percent of women believe they have what it takes to turn those opportunities into a business, compared to 61 percent of men.
- They're not all lone wolves. Nearly half of startups in 2014 involved partnerships of two or more people. Companies with more than one founder have bigger growth plans than solopreneurs. Just 35 percent of one-person businesses expect to have six or more employees within the next five years, while 75 percent of companies with three or more founders expect this level of hiring.
- They're not all spring chickens. While young startup founders may garner most of the media attention, 11 percent of Americans aged 55 to 64 own a startup. In fact, the U.S. has the highest percentage of older startup owners of any of the 29 advanced economies in the study.
- They're ambitious: Nearly one-fourth of U.S. entrepreneurs expect to employ 20 or more people in the next five years. That's an increase from 16 percent who planned that level of hiring in 2012 and 2013.
- They're innovative: 36 percent of U.S. entrepreneurs surveyed say they offer a new product or service to the marketplace.
Overall, U.S. entrepreneurs are more ambitious, more optimistic and more successful in starting businesses than entrepreneurs in other developed nations. But there are still some areas that could be improved.
One, of course, is the relatively low rate of entrepreneurship among women. Another is the fact that even though more than three-quarters of Americans have positive opinions of entrepreneurs, and see entrepreneurship represented in the media as a positive choice, the percentage of people who actually know an entrepreneur in real life has declined to 29 percent. That’s problematic because, as the study notes, positive real-life role models are invaluable in successfully starting and running a business.
What does this mean to you?
- If you are an entrepreneur with a successful business, take time out of your busy days to serve as a role model for someone else. Perhaps you can work with Junior Achievement or other youth-oriented organization to help young people learn more about entrepreneurship. Perhaps you can mentor an individual or serve on the advisory board of a small business. There are many ways to share your expertise and enthusiasm.
- If you are a startup entrepreneur or someone with dreams of launching a business, find a mentor to help you. Having a sounding board to bounce your ideas off of and a person to guide you along the way can make all the difference to the success or failure of your new business.
Looking for a mentor? You can find one at SCORE. Visit www.score.org to get matched with a mentor and get free business advice 24/7.