U.S. Business Startup Activity Drops in 2011 but Remains Above Pre-Recession Levels

Entrepreneurship is alive and well in the wake of the Great Recession, although the rate of new business creation dipped during 2011 and startup founders remained more likely to fly solo than employ others. That’s the big takeaway from the “Kauffman Index of Entrepreneurial Activity,” a leading indicator of new business creation in the United States published annually and released today by the Ewing Marion Kauffman Foundation.

The 2011 Index shows a 5.9 percent drop from 2010 with approximately 543,000 new businesses created each month during the year, or 0.32 percent of American adults per month in 2011. This remains among the highest levels of entrepreneurship over the past 16 years. The quarterly employer firm rate also remained essentially flat from 2010 to 2011 at 0.11 percent.

In addition to this overall rate of entrepreneurial activity, the Kauffman Index presents separate estimates for specific demographic groups, states and select metropolitan statistical areas (MSAs). It provides the only national measure of business creation by specific demographic groups.

The 2011 data allow for an update to annual reports dating back to 1996. Read the 2011 report and download the infographic here.


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