Small Business Reading Room

Tuesday, May 03, 2011

Kauffman Index of Entrepreneurial Activity 1996-2010

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States.

New 2010 data allow for an update to previous reports, with consideration of trends in the rates of entrepreneurial activity over the fifteen-year period between 1996 and 2010. The Kauffman Index reveals important shifts in the national level of entrepreneurial activity, and shifts in the demographic and geographic composition of new entrepreneurs across the country.

Here are a few of the key findings for 2010:

  • In 2010, 0.34 percent of the adult population (or 340 out of 100,000 adults) created a new business each month, representing approximately 565,000 new businesses per month. The 2010 entrepreneurial activity rate is the same as the 2009 rate, but represents an increase from 2007, and represents the highest level over the past decade and a half.

  • The entrepreneurial activity rate among Latinos increased from 0.46 percent in 2009 to 0.56 percent in 2010, reaching the highest level over the past decade and a half.

  • The Asian entrepreneurial activity rate also increased substantially in 2010 (from 0.31 percent to 0.37 percent).

  • The African-American and non-Latino white entrepreneurial activity rates decreased from 2009 to 2010.

  • Immigrants were more than twice as likely to start businesses each month than were the native-born in 2010. The immigrant rate of entrepreneurial activity increased sharply, from 0.51 percent in 2009 to 0.62 percent in 2010, further widening the gap between immigrant and native-born rates. The native-born rate is 0.28 percent.

  • The youngest age group (ages twenty-five to thirty-four) experienced an increase in entrepreneurial activity from 2009 to 2010 (0.24 percent to 0.26 percent).

  • Entrepreneurship rates increased the most for high school dropouts (0.49 percent to 0.59 percent), and decreased the most for high school graduates (0.38 percent to 0.34 percent) in 2010, also signaling that opposing trends may be due to the Great Recession pushing many individuals into business ownership because of high unemployment rates.

  • So how did your state measure up in the report?

    Read for yourself below:

    Kauffman Index of Entrepreneurial Activity 1996-2010 (PDF)



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