Five years ago, startup activity was in a slump. But things are looking up, according to the 2015 Kauffman Index. Last year the downward trend reversed, meaning more entrepreneurs launched their own businesses in what is the largest year-over-year increase in the past 20 years.
Findings in the 2015 Index show that 310 out of 100,000 adults, or 0.31%, started new businesses each month, on average an increase over the previous year’s 0.28% of the adult population. That translates to just over half a million (530,000) new business owners a month.
The percentage may seem incremental, but it’s important, according to the researchers at the Kauffman Foundation. As Dane Stangler, the Kauffman Foundation’s vice president of research and policy, wrote in the report, “The creation and growth of new companies, as well as the closure and shrinkage of existing companies, are at the heart of ‘economic dynamism.’” That means that unemployment, wage growth, and productivity, among other factors, are driven by entrepreneurial activity, he states.
Not surprisingly, the Startup Activity Index usually mirrors the rises and falls of the business cycles of the past two decades, dipping down during the years of the economic recession. There is a glimmer of hope given the current rebound, but the Kauffman researchers caution that the increase is still well below historical trends.
Yet taken together, the numbers in the report reveal a multilayered portrait of entrepreneurship in America right now….
Read the full story at The State Of The American Entrepreneur In 2015