A recent Kauffman Foundation study shows a big jump in business start-ups in 2009, with 558,000 new enterprises created each month. This represents the highest entrepreneurial activity the country has seen in 14 years.
“Challenging economic times can serve as a motivational boost to individuals who have been laid off to become their own employers and future job creators,” Carl Schramm, president and CEO of the Kauffman Foundation, said in the foundation’s press release. “Because entrepreneurs drive the economy, the growth in 2009 business startups is encouraging and hopefully points to a hopeful trend in terms of our economic recovery.”
The Kauffman study noted a few interesting demographic shifts. African-Americans were responsible for the biggest increase in business creation, rising from 220 starts per 100,000 African-American adults each month in 2008, to 270 starts each month in 2009. Yet, Latinos and Asians experienced declines in entrepreneurial activity.
Businesses were more likely to sprout up in Montana and Oklahoma, and the least likely to surface in Mississippi and Nebraska. And more start-ups were birthed by 35- to 44-year-olds than any other age group.
It’s hard to say if these businesses will stick around long enough to create jobs. (Individuals who were laid off and decided to freelance for a few months in between jobs may be considered “business starts” by this study.) Some will probably disappear as unemployment levels improve, but others may remain sole proprietors or even expand, as the newly self-employed realize they enjoy being their own boss.
We’re hopeful that the remaining startups from 2009 will prosper, creating jobs and contributing to the economic recovery.
To keep tabs on the small business economic climate throughout 2010, follow SurePayroll’s monthly Scorecard which analyzes data of tens of thousands of small businesses across the country.