Wednesday, March 10, 2021

Early-stge Entrepreneurship


Released February 2021

Indicators in this series include: rate of new entrepreneurs, opportunity share of new entrepreneurs, startup early job creation, and startup early survival rate, as well as the Kauffman early-stage entrepreneurship (KESE) index.

National Report on Early-Stage Entrepreneurship in the United States: 2020

This report presents national trends in early-stage entrepreneurship in the United States, as well as trends for specific demographic groups as available.

The rate of new entrepreneurs was substantially higher in 2020 than in 2019 or in previous years, reflecting more transitions into entrepreneurial activity, broadly defined, among the population during pandemic conditions.

At the same time, the opportunity share of this activity plummeted to the lowest share in 25 years, indicating that many of these transitions were undertaken by people with few other options for economic engagement.

Report Highlights

  • Nationally, the rate of new entrepreneurs in 2020 was 0.38%, meaning that an average of 380 out of every 100,000 adults became new entrepreneurs in a given month. The monthly rate increased substantially in 2020 as the economy went through the shutdowns, job losses, and reopenings that characterized the COVID-19 pandemic.
  • The rate of new entrepreneurs was 0.30% among women and 0.48% among men, reflecting large increases for both from the previous year.
  • The opportunity share of new entrepreneurs was 69.8% in 2020, representing a substantial drop from 2019 (86.9%). This opportunity share of new entrepreneurs is the lowest over the past 25 years and perhaps longer. The decline from 2019 to 2020 during the pandemic was 17.1 percentage points, much larger than the one-year decline of 6.9 percentage points from 2008 to 2009 during the Great Recession.
  • The opportunity share of new entrepreneurs declined sharply for both women and men in 2020.

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