Are Entrepreneurs a Dying Breed?

Are Entrepreneurs a Dying Breed?

Building and running your own business is, for many people, part of the American Dream. But new research from the Kauffman Foundation indicates that business creation declined in 2013.

That’s not necessarily a bad thing. In recent years, many people who started their own businesses did so out of necessity because they were unable to find other work due to the recession.


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Last year, 280 out of 100,000 adults started businesses, compared to 300 out of 100,00 in 2012. Unemployment is at its lowest level in years, and people are more likely to seek work at an existing company rather than striking out on their own.

The report also indicates that hustling is on the decline, as well. The “gig economy,” as it is formally known, consists of jobs like running at Etsy shop, TaskRabbiting or driving a Lyft cab. With more jobs available, people are ditching these quick-cash arrangements.

Another facet of the decline in entrepreneurship is the rate of survival for these fledgling companies: Over the past five or six years, it's been steadily declining. The historical and oft-noted statistic is that 50% of new businesses last five years, but this has dropped into the low 40s during this economic cycle, according to Dane Stangler, VP of Research and Policy at the Kauffman Foundation. “If you assume people have been forced into (starting a business due to unemployment), they may be starting lower-quality companies,” he adds.

Best-case scenario? These companies aren’t making it because their owners, forced into entrepreneurship, simply found new, well-paying jobs.


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