2019 Early-Stage Entrepreneurship in the United States: National and State Report

Abstract

The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship. This report presents four indicators tracking early-stage entrepreneurship for the years 1996–2019: rate of new entrepreneurs reflects the number of new entrepreneurs in a given month, opportunity share of new entrepreneurs is the percentage of new entrepreneurs who created their businesses out of opportunity instead of necessity, startup early job creation is the total number of jobs created by startups per capita, startup early survival rate is the one-year average survival rate for new employer establishments. National and state level trends are reported for all four indicators. In addition, demographic trends are reported for the rate of new entrepreneurs and opportunity share of new entrepreneurs. National Trends in Early-Stage Entrepreneurship in 2019: • Nationally, the rate of new entrepreneurs in 2019 was 0.31 percent, meaning that an average of 310 out of every 100,000 adults became new entrepreneurs in a given month. - The rate of new entrepreneurs was 0.23 percent among women and 0.38 percent among men, reflecting a slight decline for men and an essentially no change for women from the previous year. - In 2019, the rate of new entrepreneurs was the highest among Latinos (0.44 percent) and lowest among African Americans (0.24 percent). It decreased for Latinos and decreased slightly for Asians, but remained constant for African Americans and whites. - The rate of new entrepreneurs was 0.44 percent for immigrants, which is substantially higher than for native-born Americans (0.28 percent). Immigrants started businesses at a lower rate than they did in the previous year. - The rate of new entrepreneurs was highest among Americans aged 45–54 (0.36 percent) and lowest among Americans aged 20–34 (0.24 percent). It declined slightly in 2019 among all age groups except for the aged 20–34 group. • The opportunity share of new entrepreneurs nationally in 2019 was 86.9 percent. - The opportunity share of new entrepreneurs increased for women and remained roughly constant for men in 2019. - African Americans and Asians experienced increases in the opportunity share of new entrepreneurs in 2019, continuing upward trends over the past few years. The opportunity share for Latinos and whites remained roughly constant but showed a similar general positive trend over the past few years. - The opportunity share of new entrepreneurs increased for immigrants in 2019. - All age groups, except ages 45–54, experienced increases in the opportunity share, continuing upward trends since the Great Recession. • National startup early job creation in 2019 was 5.2 jobs, meaning that the average startup that hired would hire a little over 5 jobs for every 1,000 people. • Startup early survival rate was 79.6 percent in 2019, meaning that almost eight in 10 startups survived the first year. • The overall KESE Index — an equally-weighted composite of the four indicators — was 1.2 nationally. The index is normalized at zero. The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship.