The Kauffman Index of Main Street Entrepreneurship: National Trends 2016

Abstract

For the first time since the recovery got underway, Main Street entrepreneurship activity is at higher levels in 2016 than those recorded before the onset of the Great Recession. This increase was primarily driven by a jump in the business survival rates, which reached a three-decade high of 48.7 percent. This means almost half of new businesses are making it to their fifth year of operation. Greater longevity for startup businesses marks a major turnaround from the Great Recession, which saw the business survival rate drop to a low of 42.9 percent in 2011. Survival rates have increased every year since then. The national Rate of Business Owners and the Established Small Business Density remained steady in the 2016 Main Street Index. The Rate of Business Owners was 60 out of 1,000 adults, the same as the previous year. Business Density changed little, logging 676 established small businesses per 1,000 businesses. However, the results show that U.S. small businesses have gotten smaller over the last 20 years. The smallest of those small businesses – companies with one to four employees – make up 53.1 percent of all established small businesses, up from 49.5 percent in 1996.