Baruch College Co-Sponsors 2011 Global Entrepreneurship Monitor (GEM) U.S. Report
Report Shows U.S. Entrepreneurship Activity Increased More Than 60 Percent
NEW YORK, NY – November 30, 2012 – Entrepreneurship in the United States is soaring to new heights, according to the 2011 Global Entrepreneurship Monitor (GEM) U.S. Report issued today by Baruch College and Babson College.
This is the fifth year Baruch College has collaborated with Babson College on the Report. The partnership has brought together the expertise from the Blank Center for Entrepreneurial Studies at Babson College with experts from the Lawrence N. Field Center for Entrepreneurship at Baruch College.
According to the Report, with 12.3 percent of the U.S. adult population engaged in entrepreneurial activity, the U.S. experienced a 60+ percent increase in total entrepreneurial activity (TEA) from 2010 to 2011, matching the TEA level recorded in 2005. The increase follows significant drops reported in both 2009 and 2010. Further, the U.S. reported the highest TEA level among developed economies globally.
"Our 2011 report on entrepreneurship in America shows that Americans are turning to business ownership in ever increasing numbers,” said Edward Rogoff, Lawrence N. Field Professor of Entrepreneurship and Department Chair at Baruch College. “The number of Americans who are still actively in the workforce and are pursuing their own businesses has grown by 40% over the last two years. Today, more than one American in eight can be called entrepreneurs. There is simply no doubt that the future of the American economy resides with entrepreneurship.”
The Report also confirms that more than 29 million U.S. adults (18-64 years old) were starting or running new businesses in 2011. Moreover, nearly 40% of these entrepreneurs expected to create more than five new jobs in the next five years.
The 2011 Global Entrepreneurship Monitor U.S. Report’s other key findings include:
Job creation expected: An encouraging 39 percent of entrepreneurial ventures are expecting to add more than five employees over five years, indicating the potential for significant job creation and restored confidence in the United States’ economic recovery.
Nascent entrepreneurship on the rise: For the first time since the crash in 2008, nascent entrepreneurship is on the rise. In fact, the percentage of nascent entrepreneurship nearly doubled from 2010 to 2011 (8.4 percent in 2011 up from 4.8 percent in 2010). Entrepreneurial intentions also increased by over 30 percent in 2011 after holding steady from 2008 to 2010 (10.9 percent in 2011 compared to 8.3 percent in 2010.)
Increase in established business owners: 2011 saw a rebounding in the number of established business owners with a 17 percent increase over 2010. The U.S. rate of establishes business owners (9 percent) was above-average compared to other developed economies studied by GEM.
Gender gap is closing: There continue to be fewer women than men entrepreneurs, though the U.S. female/male ratio among entrepreneurs is higher than the global average. In 2011, there were approximately eight women to every 10 men entrepreneurs.
Race Implications: Blacks are twice as likely as whites to become entrepreneurs (19.3 percent to 9.7 percent, respectively.)
Age factors: Younger adults (18-24 years old) are more likely to start a business, but 10 percent of adults 55-64 years of age, and 4.5 percent over the age of 65, also intend to start businesses. Male youth have a higher perception about opportunities, while female youth are more discouraged by fear of failure.
Education shapes entrepreneurs: There is a strong relationship between entrepreneurship activity and levels of education. College graduates were over twice as likely to choose entrepreneurship (15 percent) than those with no high school education (7 percent), and almost 50 percent more likely than high school graduates.
Low fear factor: Among developed economies, U.S. entrepreneurs exhibited the lowest rates of fear of failure in the developed world, along with Switzerland and Slovenia. Less than one-third of U.S. adults (18-64) were dissuaded by fear of failure. At the same time, perceived capabilities in the U.S. were among the highest within innovation-driven economies. Over 55 percent of adults believed they had the skills and ability to start a business.
Wealth and the impact of financial means: Entrepreneurs have wealthier households than non-entrepreneurs. GEM data indicates that more affluent households more often lead to entrepreneurship.
Majority of U.S. entrepreneurs’ revenues are based on domestic sales: Only 13 percent of U.S. entrepreneurs report more than 25 percent of their revenues coming from international sales; the lowest level among innovation-driven economies.
The Global Entrepreneurship Monitor (GEM) is a not-for-profit academic research consortium that has as its goal making high quality information on global entrepreneurship activity readily available to as wide an audience as possible. GEM is the largest single study of entrepreneurial activity in the world. Initiated in 1999 with 10 countries, GEM 2011 conducted research in 54 economies all over the world.
About Baruch College:
Baruch College is a senior college in the City University of New York (CUNY) with a total enrollment of more than 17,000 students, who represent 160 countries and speak more than 100 languages. Ranked among the top 15% of U.S. colleges and the No. 5 public regional university, Baruch College is regularly recognized as among the most ethnically diverse colleges in the country. As a public institution with a tradition of academic excellence, Baruch College offers accessibility and opportunity for students from every corner of New York City and from around the world. For more about Baruch College, go to http://www.baruch.cuny.edu/.
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