The Kauffman Index of Entrepreneurial Activity was recently released for the year 2013.
The Kauffman Index is the ONLY document created that presents information on ALL new businesses that were started as full-time businesses in the U.S. by people between the ages of 20 and 64.
This latest report presents some interesting trends in the entrepreneurial world for 2013.
Consider some of the highlights:
- The annual rate of business creation declined from a peak of 6,780,000 in 2010, to 5,712,000 for 2013—over a one million drop in new businesses.
- This drop in the rate of business creation was primarily due to a drop in entrepreneurial activity by men—although there was also a slight decrease in the rate of business creation by women in 2013.
- The rate of business creation among immigrants was twice that of business creation by U.S. native-born.
- Business creation among all age groups declined in 2013—except the age group 45 to 54, which actually increased.
- Veterans created fewer businesses in 2013, continuing an 18 year decline in business creation by veterans.
- The highest rate of entrepreneurial activity was in the construction industry, with the service industry coming in second.
You can download your own copy of the Kauffman report here.
The two most interesting findings in this most recent Kauffman report are that entrepreneurial activity is falling off, and that there has been no appreciable change in the rate of business activity by women over the past 18 years.
I suppose the overall drop in new business creation can be substantially attributed to fewer unemployed people trying to start a business out of necessity in 2013, than was the case in prior years when unemployment was higher.
It is likely that many unemployed people have found jobs in the improving job market, rather than trying to learn how to start and run a successful small business.
With respect to women entrepreneurs; there has been a flurry of network news lately about the rapid increase in women entrepreneurs starting new businesses.
Unfortunately, the Kauffman report does not bear this out—at least for 2013. We’ll have to wait and see what the year 2014 has to say.
Other than that, it looks like 2013 pretty much followed historical activities by creating about 6 million new full-time businesses during the year. (Remember, the Kauffman Index excludes business creation by those under age 20, and over age 64.)
So, what happened to most of those businesses—there are not six million more businesses today than there were a year ago?
Or are there? Watch for my next article where I will discuss the “Reality of Business Creation and Failure in the U.S.”