New Firm Formation Picking Up in the US, Led by Women

One of lingering negative aftereffects of the 2007-2009 recession has been sluggish business start-up rates – except, of course, among women-owned businesses. (See our 2015 and 2016 State of Women-Owned Businesses reports, underwritten by American Express OPEN.) Now, a recent analysis from the Kauffman Foundation has found that start-up rates are picking up again, and are continuing to be led by women-owned firms.
The 2016 Kauffman Index of Startup Activity, published last month, finds that:

  • The Startup Activity Index, a key annual indicator of new business creation, rose to 0.38 in 2015 – going up for the second year in a row – a mere two years after plunging to its lowest level (0.28) in two decades. (An index of 0.38 means that 380 out of 100,000 every adults started a business each month during 2015.)
  • A growing share of new firms are being started by people of color: with 40 percent of new entrepreneurs being comprised of African American, Latino, Asian, or other non-white entrepreneurs in the 2016 Index.
  • Of greatest note to womenablers, the rate of women entrepreneurs saw the biggest increase in almost twenty years—increasing from 0.22 percent to 0.26 percent (meaning 260 out of every 100,000 females become an entrepreneur each month). Approximately four in 10 (41%) new entrepreneurs, according to the Index, are now female.

kauffman-index-2016-startup-activity-entrepreneurial-demographics-profiles

Download the report and learn more at the link highlighted above. A new microsite also provides the ability to look at startup activity on a state-by-state and metro area-level basis.

In other positive women’s entrepreneurship news, the Census Bureau’s inaugural Annual Survey of Entrepreneurs, which will publish insights on employer firms over the next three years thanks to support from the Kauffman Foundation, was just released. Look for highlights from that survey in our next post.