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Who’s Crazy Enough To Have Started A Business In 2008?

Posted by Internet Guru
May 1, 2009

As it turns out, tons of people. The Kauffman Foundation just released the latest results in its annual Index Of Entrepreneurial Activity. According to the Index, in 2008 an average of 0.32 percent of American adults started businesses each month. That’s higher than the 0.28 percent, 0.29 percent, and 0.27 percent from 1997 to 1999–when the economy was booming. It’s true that a lot of people hadn’t felt the recession yet for much of 2008. But in 2002–a year of recession following 9/11–the number of people starting a business
each month went up 0.29 percent, from 0.26 percent in 2001. It continued to increase to 0.30 percent in 2003.

The bad news, however, concerns the type of businesses being created.

Entrepreneurship rates increased only for low-income types of businesses and not for high-income types, which may be early signs of how the recession is impacting firm formation,” said study author Robert Fairlie, professor of economics and the director

of the Master’s program in Applied Economics and Finance at the University of California, Santa Cruz.

Here are some other highlights from the Index:

The immigrant rate of entrepreneurial activity increased from 0.46 percent in 2007 to 0.51 percent in 2008, further widening the gap between immigrant and native-born rates. Native-born rates increased only slightly, from 0.27 percent to 0.28 percent.

The states with the highest entrepreneurial activity rates were Georgia (590 per 100,000 adults), New Mexico (580 per 100,000 adults), Montana (530 per 100,000 adults), Arizona (490 per 100,000 adults), Alaska (440 per 100,000 adults), and California (440 per 100,000 adults). The states with the lowest entrepreneurial activity rates were Pennsylvania (140 per 100,000 adults), Missouri (150 per 100,000 adults), Wisconsin (170 per 100,000 adults), West Virginia (170 per 100,000 adults), Iowa (190 per 100,000 adults), and Ohio (190 per 100,000 adults).

usnews.com

Small Business

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