Entrepreneurial activity is up 60 percent in the United States over last year, reaching its highest level since 2005, according to a new report.
About 12.3 percent of U.S. adults — around 29 million — are involved in entrepreneurial activity, the 2011 Global Entrepreneurship Monitor issued by Babson College and Baruch College reported.
This rise marks the the first uptick in Americans starting or running new businesses since 2008. The rate had been steadily falling for the past three years, reaching its lowest point in 2010 at 7.8 percent. The report
surveyed more than 5,800 adults between the ages of 18 and 99.
Fewer adults reported starting businesses out of necessity this year than last, signaling a shift in entrepreneurial motivation. “In the depths of the recession, we saw a tremendous increase in people starting businesses out of necessity. In 2011, the entrepreneurship rate was pulled up primarily by those starting businesses to pursue promising opportunities,” Donna J. Kelley, Babson associate professor of entrepreneurship and lead researcher said.
Nine percent of U.S. adults are established business owners, according to the report — which is above average compared to other developed economies GEM studied. Young adults (between 18 and 24 years) were more likely to start businesses than their older counterparts, but their entrepreneurship rate was down since 2008.
Among developed economies, American entrepreneurs had the lowest rates of fear of failure along with Switzerland and Slovenia, with less than a third of U.S. adults dissuaded from entrepreneurship by fear of failure.
Follow On Small Business on Twitter.