The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
Happy Entrepreneurs’ Day!
As you may know, World Entrepreneurs’ Day is coming up on August 21. The purpose of this day is to create awareness of entrepreneurship, innovation, and leadership throughout the world, as well as celebrate the people who started a business alone. Today, there are 28 million small-businesses in the United States and more than 500,000 entrepreneurs start a business each month. This infographic is a visual resource by New Jersey Institute of Technology that highlights the need for more entrepreneurs in the United States and how immigrants and millennials are the next working class to continue the growth of the U.S. economy.
This infographic highlights interesting facts about entrepreneurship like how millennials have launched twice as many companies across the world than boomers and immigrants are twice as likely to open their own businesses than native-born Americans in the U.S.
To learn more about entrepreneurship in the U.S. and the impact immigrants and millennials have on the rising population of business-owners, you can view the full infographic below:
Click to open / Right-click for save options
THE NEED FOR MORE ENTREPRENEURS IN THE UNITED STATES
The United States is seen as the land of opportunity to start a business and achieve the American dream. While the U.S. economy was hurt in the Great Recession from 2007 to 2009, entrepreneurship remained strong in the United States. Millennials, however, were raised during the Great Recession and may hold on to those financial concerns while they get ready to become the majority of the working population. The question is whether they will put those worries aside and begin their entrepreneurial journeys toward starting their own businesses.
THERE ARE 28 MILLION SMALL BUSINESSES IN THE UNITED STATES
PERCENTAGE OF PRIVATE SECTOR GDP
PERCENTAGE OF LABOR FORCE
ENTREPRENEUR START ROUGHLY 543,000 BUSINESSES EACH MONTH
STATES THAT EXPERIENCED THE BIGGEST INCREASE IN RANKS IN THE 2015 START-UP INDEX, COMPARED TO 2014
IMMIGRANTS ARE ALMOST TWICE AS LIKELY TO OPEN THEIR OWN BUSINESSES AS NATIVE-BORN AMERICANS LIVING IN THE UNITED STATES
41% OF FORTUNE 500 COMPANIES WERE FOUNDED BY IMMIGRANTS OR CHILDREN OF IMMIGRANTS
7 OUT OF 10 OF THE MOST VALUABLE BRANDS IN THE WORLD COME FROM AMERICAN COMPANIES FOUNDED BY IMMIGRANTS OR CHILDREN OF IMMIGRANTS
STATES WITH THE HIGHEST PERCENTAGE OF IMMIGRANT ENTREPRENURS
- California 31%
- New York 25.2%
- New Jersey 25%
- Florida 24.4%
- Hawaii 22.1%
According to the results of the Annual Survey of Entrepreneurs (ASE), different racial groups rely on sources in different ways:
ASIAN ENTREPRENEURS RELY THE MOST ON PERSONAL AND FAMILY SAVINGS 73.2%
CAUCASIAN ENTREPRENEURS RELY THE MOST ON BUSINESS LOANS FROM BANKS 18.7%
AFRICAN-AMERICAN ENTREPRENEURS RELY THE MOST ON PERSONAL CREDIT CARDS 17.6%
SMALL BUSINESSES AND THE GREAT RECESSION
57% OF FORTUNE 500 COMPANIES WERE FOUNDED DURING AN ECONOMIC DOWNTURN OR A BEAR MARKET
The formation rate of new businesses went down in 2006, in the lead-up to the recession, and started to increase in 2007 before spiking in 2008. It hit its peak in 2009, when the rate was 17% higher than it had been three years before. The only other significant spike reported in the study occurred from 2001 to 2004, the period during which the boom times of the late 1990s gave way to the dot-com bust.
ENTREPRENEURSHIP DURING THE GREAT RECESSION WAS THE HIGHEST IN:
PROFESSIONAL SERVICES 27.7%
CONSTRUCTION SECTORS 17%
EDUCATION AND HEALTH SERVICES 11.8%
Through the Great Recession forces many businesses to close or file for bankruptcy, many start-ups were founded, driven by the high rise of unemployment.
AFTER THE END OF THE GREAT RECESSION, THE START-UP RATE FROM 2010-2011 FOR NEW BUSINESSES DROPPED BY 5.9%
FROM 2010 TO 2014, ROUGHLY 60% OF US COUNTIES WITNESSED MORE BUSINESSES CLOSING THAN OPENING
THE RETURN OF THE SMALL BUSINESS AND ENTREPRENEURS
UNEMPLOYMENT AND ENTREPRENEURSHIP
UNEMPLOYMENT CURRENTLY STANDS AT 4.6% (the lowest rate since 2007)
IN 2013 22% OF NEW ENTREPRENEURS ESTABLISHING THEIR OWN BUSINESSES WERE PREVIOUSLY UNEMPLOYED
IN 2015 31% OF ADULTS STARTED A NEW BUSINESSES EACH MONTH
According to the Global Entrepreneurship Monitor (GEM)
27 MILLION AMERICANS OF WORKING AGE HAVE STARTED A NEW BUSINESS (the highest number the study reported in the past 16 years)
ENTREPRENEURIAL SENTIMENT 51% OF THE WORKFORCE BELIEVES GOOD OPPORTUNITIES EXIST FOR STARTING BUSINESSES
DECLINING FAILURE RATE OF SMALL BUSINESSES 30% THE SMALL-BUSINESS FAILURE RATE HAS FALLEN BY 30% SINCE 1977
25% OF SMALL BUSINESSES ARE EXPECTING TO HAVE 20 OR MORE EMPLOYEES WITHIN THE NEXT FIVE YEARS
51% BETWEEN 1977 AND 2013, THE SHARE OF NEW BUSINESS EMPLOYERS DECREASED
MILLENNIALS HAVE LAUNCHED TWICE AS MANY COMPANIES ACROSS THE WORLD AS BOOMERS HAVE
22% OF MILLENNIAL ENTREPRENEURS SOURCED WERE FIRST-TIME BUSINESS OWNERS
75% OF MILLENNIALS BELIEVE THE PROFITS FOR THEIR NEW BUSINESSES WILL INCREASE OVER THE NEXT YEAR
Entrepreneurs leading teams of:
- MILLENNIALS 122 EMPLOYEES
- BOOMERS 30 EMPLOYEES
24% OF US ENTREPRENEURS expect to employ at least 20 people within five years
MILLENNIAL ENTREPRENEURS ARE MORE ACTIVE IN THE FOLLOWING SECTORS
- INVESTMENT MANAGEMENT
With companies such as Snapchat, Facebook, and Apple leading innovation in their respective industries, entrepreneurship is attracting wider attention and piquing curiosity among young millennials. Entrepreneurial success stories of Elon Musk, Mark Zuckerberg, and Evan Spiegel are inspriing the next generation of entrepreneurs to take greater risks, set higher goals, and challenge themselves on a deeper level than previous generations.
NJIT New Jersey Institute of Technology