More Americans Are Embracing Entrepreneurship

Photo Credit: Times of Entrepreneurship

Evidence continues to build that Americans are re-embracing the idea of entrepreneurship as a career, path to wealth and a way to rebuild communities.

New data on young people’s attitudes toward entrepreneurship, voters’ support for the issue and a changing legislative landscape – entrepreneurship is one of the few issues that appears to have bipartisan support – are shedding new light on the surge of business starts recording during 2020 and 2021.

Many people start businesses during and after a recession, and the U.S. Census Bureau recorded a record number of business starts in 2021. But now, it looks like the sustained flight from the corporate world is resulting in a re-embrace of entrepreneurship. That could reverse a decades-long, long-term trend in which Americans feared failure more and preferred the risk of employment.

In this new round of data, the Global Entrepreneurship Monitor found a surprisingly high number of young people planning to start businesses in 2021-23, while more entrepreneurs of all ages reported seeing entrepreneurs as a vehicle for social and environmental change.

Meanwhile, Americans almost unanimously agree that “it is important to America’s future that citizens have a fair opportunity to start and grow their own business,”: according to a survey released by Right to Start, based in Kansas City. The organization advocates for entrepreneurship as a civic priority. Some 95% of Republicans, 95% of Independents, and 92% of Democrats agreed.

Old Patterns of Discrimination

But entrepreneurs are still up against a lot. Changes in the U.S. economy, including regulations that have favored big business, mean that it’s harder to grow small businesses. The vast majority of startups have a hard time finding any kind of capital, even bank loans. Old patterns of discrimination are still operative. Women and people of color, who are the most likely to start tiny businesses, face the highest barriers to growing companies.

The pandemic exacerbated some of women’s challenges. Previous Global Entrepreneurship Monitor research found “In the United States, almost half of women cited the pandemic as the reason for discontinuing their business, higher than the global average and twice the rate reported by women in Canada.” (Canada is typically the comparison country for the United States). Women in America versus elsewhere in the world are also more apt to see entrepreneurship as a path to building wealth.

Still, a growing number of young people, those aged 18-24, said they intended to start businesses in 2021-22, according to the latest report, which focused on the United States. In 2019, 15.8% of young people intended to start businesses. In 2021, the rate was 18.9% — a level equal to older age groups, and a trend GEM has not found in 20 years of surveys.

That follows Census Data that showed a record 5.4 million people filed to start new businesses in 2021, up 53% and over 2019, and up 23% over 2020.

A Civic Dialogue

The idea of small businesses has always been supported by Americans in word, if not in policy – but there are signs that the support now is one of the few areas where Americans on the left and right agree on the way to frame the issue. The Right to Start survey was conducted jointly by Republican and Democratic pollsters, of 1,000 registered voters who confirmed they voted in the 2020 presidential election.

The current support for entrepreneurship may be partly about walking away from contentious politics. Policymakers and politicians may be coalescing around entrepreneurship precisely because it’s the rare issue on which there’s enough agreement to pass laws, according to Victor Hwang, Right to Start founder. He said on a recent trip across the Eastern U.S. to Kansas City, he met local organizers and a city councilwoman who greeted the survey findings almost with a sense of relief – and energy toward action.

“The (other) ideas that policymakers have been given are polarizing,” said Hwang, the founder of Right To Start. He said he’s seen a surge of interest among state officials in working on entrepreneurship as an issue.

The organization’s model legislation was introduced in five legislatures last year, he said. For next year, Right to Start already has 10 commitments from legislators interested in introducing it. (It typically takes a few years for any kind of legislation to gain enough momentum to pass in America’s deeply politicized landscape).

A Vehicle For Helping The Environment

The other interesting information in the GEM data, which polled polled more than 2,000 U.S. adults in 2021, is the degree to which people planning to start businesses and hose already running companies are prioritizing social and environmental impact.

Over two-thirds of entrepreneurs (68%) and over half of established business owners (54%) indicate that they prioritize the social and/or environmental impact of their businesses above profitability or growth, said the GEM Report.

Nearly half (49%) of entrepreneurs and established business owners told GEM they had taken action over the past year to minimize the impact of their business on the environment.