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.

WASHINGTON,DC- FEB.1, 2012: Undergrad students, in Professor Richard Linowes' "Global Entrepreneurship" class at Kogod Business School, at American University discuss and review articles from the Economist magazine summarized on the white board, in Washington, DC on Feb.1, 2012 . ( Photo by Jeffrey MacMillan ) (Jeffrey MacMillan/JEFFREY MACMILLAN)

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.

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