Recession Doesn’t Kill Entrepreneurship – OnlineBusinessDegree.org
If necessity is the mother of invention, then the recession taught Americans to reassess their priorities, and for many, sparked a desire to create their own business opportunities. As the economy continues to show progress, the seeds of entrepreneurship nurtured during the recession are coming to fruition, and new businesses have begun to emerge.
The American spirit of entrepreneurism is thriving. A recent report from Babson College and Baruch College showed a 60% increase in total entrepreneurship activity (TEA) in the United States, the most significant jump since pre-recession levels in 2005.
The 2011 Global Entrepreneurship Monitor U.S. Report found that 29 million people were running or starting a new business in 2011, a significant improvement on previously declining numbers of entrepreneurs in 2009 and 2010. The growth in enterprise also means more jobs, with at least 40% of the new businesses surveyed said they plan to add at least five new jobs in the next five years.
The United States fared well in comparison to the other 54 developed global economies surveyed in the report, claiming the top rank of entrepreneurial activity. Nascent entrepreneurship, or emerging businesses that are still under development, nearly doubled from 2010 to 2011, the first increase since the 2008 economic crash. Entrepreneurial intentions saw a 30% boost in 2011, after remaining stagnant for the previous two years.
“We saw an unprecedented jump in entrepreneurial activity in 2011,” Donna J. Kelley, associate professor of entrepreneurship at Babson College, and the report’s lead author, said in a press release. “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 – a strong sign of entrepreneurial activity occurring as a result of optimism, not desperation.”
A breakdown of the numbers revealed there are eight women entrepreneurs to every 10 men, but the gender gap is narrowing. There were twice as many black entrepreneurs than white entrepreneurs in 2011. Younger adults ages 18-24 created more new businesses than older generations, but there was a 10% increase in entrepreneurship among the 55-64 age range. College graduates were twice as likely to launch a business than those without a college education.
Entrepreneurs are increasingly turning to online business degrees to be better prepared for the challenges of starting a new business. In addition to the Global Entrepreneurship Monitor, the largest single study of entrepreneurship activity, Babson offers online business degrees in entrepreneurship
at the undergraduate and MBA level.
Follow Elise Rambaud Marrion on Twitter @elisermarrion.