After years of decline, U.S. startup activity increased during the past year, according to the 2015 Kauffman Index: Startup Activity.
The increase in the 2015 index represents the largest year-over-year increase in the last two decades and reverses a downward cycle that began in 2010. However, even the latest startup rate ranks below historical trends.
“This rebound in entrepreneurial activity lines up with the strength we’ve seen in other economic indicators, and should generate hope for further economic expansion,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “But, it’s important to view this short-term uptick in context of the bigger picture – we are still in a long-term decline of activity, which affects job creation, innovation and economic growth.”
The report released today covers national business creation findings; state and metropolitan data will be released June 4.
Among the highlights:
• In the 2015 Index, 310 out of 100,000 adults, or 0.31 percent, started new businesses each month. That was up from 0.28 percent in the 2014 report.
• Most new entrepreneurs (63.2 percent) were men. The 36.8 percent of new entrepreneurs who were women is close to the two-decade low of 36.3 percent in the 2008 Index.
• All racial and ethnic groups, particularly Latinos, experienced increases in the rate of new entrepreneurs between the 2014 and 2015 indexes. The Latino share of all new entrepreneurs rose from 10 percent in 1996 to 22.2 percent in 2014. The Asian share rose substantially during that period; the black share increased slightly and the white share declined.
• 28.5 percent of all new entrepreneurs are immigrants, compared to 13.3 percent in the 1997 Index.
• Opportunity entrepreneurs, those who were not unemployed and not looking for a job before they started their new venture, was 79.6 percent, an increase over the 2014 Index.
• Startup density, the number of new employer businesses by total population, increased from 128.8 percent to 130.6 percent. However, startup density remains below typical historical rates.
The Kauffman Index: Startup Activity is the first of three reports to be released under the umbrella of the new Kauffman Index of Entrepreneurship. Future topics include “Main Street” businesses and growth ventures. The 2015 data allow for an update to annual reports dating back to 1996. Interactive data spanning all 18 years is available at www.kauffmanindex.org.