According to the Kauffman Index, the largest index tracking entrepreneurship across city, state and national levels for the United States, new business creation is on the rise in 2015. After a five-year slump, American entrepreneurs rallied back last year, opening upward of 530,000 new businesses each month throughout 2014. It all added up to the largest year-over-year increase in new business launches in the past two decades.
While you might think that tech-savvy Millennials would lead the pack of new entrepreneurs, the latest figures show just the opposite. In fact, the rate of new business launches was lowest among entrepreneurs in 20-34 age range. Instead, it’s Baby Boomers (age 55-64) who are proving the most active. This group today represents 25.8 percent of new startups, up from 14.8 percent in 1996.
Those coming to America from abroad also are lending significantly to the rise. Some 28.5 percent of all new entrepreneurs in 2014 were immigrants, compared to just 13.3 percent in 1997. And among various racial and ethnic groups, Hispanics lead. All groups showed some increase, but Hispanics topped them with a 22.1-percent share of new startups last year compared to 10 percent in 1996.
Perhaps most encouraging is the fact that nearly 80 percent of new business owners were not previously employed. This is significant because, while 20 percent of new entrepreneurs were prompted by a job loss, the vast majority instead started businesses simply because they recognized and acted upon opportunity. It represents a major improvement over recent years’ reports, particularly the 2010 index wherein it was revealed that, during the Great Recession, opportunity entrepreneurs opened businesses at one of the lowest rates in decades.
"Entrepreneurs starting new businesses because they saw market opportunities is back to historical norms," said Arnobio Morelix, a research analyst at the Kauffman Foundation and one of the study’s authors.
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