U.S. Entrepreneurship Levels Continue On An Upward Trend
Wednesday, March 11th, 2020
Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upward over the past 19 years, according to the 2019–2020 Global Entrepreneurship Monitor Global Report, released March 3 in Miami at the GEM Annual Meeting.
In addition, there is a growing positive disposition toward entrepreneurship, as well as recognition of the overall benefit of entrepreneurial activity and its value to society. Entrepreneurial attitudes flourish in the U.S. with seven out of 10 adults agreeing that they are thought by others to be highly innovative, demonstrating their belief in their own entrepreneurial potential.
Other report findings:
More than half of the population in 36 of the 50 economies believes that they have the skills, knowledge, and experience to start their own business. In the United States, 65.5% of adults reported these capabilities perceptions, the highest level on this indicator since GEM started in 1999.
A greater proportion of men than women typically engage in Total Entrepreneurial Activity (TEA) overall, but the gender gap narrowed in the United States in 2019, where there are nine women entrepreneurs for every 10 men entrepreneurs. In 2018, the female to male entrepreneurship ratio was 7.5 to 10.
Regarding motivation, "purpose-driven" entrepreneurship is taking hold. For example, more than seven out of 10 adults engaged in early-stage entrepreneurial activity in South Africa, India, Guatemala, and Panama responded that they are motivated to make a difference in the world.
Women are generally more purpose-driven than men. Women starting a business are more likely to agree with the motivation of making a difference to the world.
Entrepreneurship is an important way of lifting women out of poverty, since women also were more likely than men to agree that earning a living because jobs are scarce is an important motivation.
Men starting a business are more likely to agree with the motives of building great wealth or high income, or of continuing a family tradition, than women.
In 42 of the 50 economies, less than half of those who see good opportunities would be deterred by fear of failure.
"The positive attitudes about entrepreneurship that we see in the United States, and in many other parts of world, is an encouraging sign. It indicates that there is both a supply of potential entrepreneurs and those who may support their efforts. This is all reflective of the visibility, events, and leadership that contribute role models and inspiration for entrepreneurs," said Donna Kelley, PhD, Frederic C. Hamilton Professor of Free Enterprise Studies at Babson College.
"It is encouraging to see the substantive evidence of 'purpose-driven' entrepreneurship taking hold at the grassroots level, demonstrating the collective will for future business sustainability," said Aileen Ionescu-Somers, GEM executive director, speaking at the GEM Launch in Miami. "We will continue to research new questions that provide policymakers and other actors in the entrepreneurial ecosystem with credible data to make informed decisions."
Babson College and GEM
Babson continues its long-standing support for this research effort. Babson will provide a new home for the U.S. GEM team, and projects to apply and leverage the body of GEM data, in the newly established Butler Institute for Free Enterprise through Entrepreneurship at Babson, created with $10 million in funding from the John E. Butler family. Babson co-founded GEM with the London Business School in 1999.
"Babson is proud to be a founding partner and longtime supporter of the Global Entrepreneurship Monitor," said Babson President Stephen Spinelli Jr. MBA'92, PhD. "The outcomes of this paramount study impact economic policies, educate students, entrepreneurs and stakeholders worldwide, and influence the research and teaching around entrepreneurship all over the globe."
The Miami meeting also highlighted the recent GEM report on Women's Entrepreneurship, issued in November 2019, which showcased areas where women entrepreneurs have made progress, how ecosystems influence and are influenced by women entrepreneurs, and where there are still gaps, challenges, and opportunities. Presenting were Vice Provost of Global Entrepreneurial Leadership Candida G. Brush, Amanda Elam, co-author, Diana International Research Institute Fellow, Center for Women's Entrepreneurial Leadership at Babson, and Smith College Jill Ker Conway Innovation & Entrepreneurship Center Director Monica Dean.
Celebrating the entrepreneurial outlook for the host city were Miami Mayor Francis X. Suarez, Knight Foundation Director Raul Moas, eMerge Americas President Melissa Medina, Gallant CEO and Founder Aaron Hirschhorn, and Babson Miami Director Gustavo Trindade MBA'17. Babson and eMerge are planning to release later this month a report regarding the Miami entrepreneurial ecosystem.
One supporter of that ecosystem, Alberto Perlman '98, co-founder and CEO of the global brand Zumba, held a fireside chat with Babson's Blank Center Executive Director Debi Kleiman.
Babson Entrepreneurship Professor Heidi Neck led a special session of Babson's Symposia for Entrepreneurship Educators (SEE), a programs designed to further develop faculty from around the world in the art and craft of teaching entrepreneurship and building entrepreneurship programs.