Time to Startup!

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Entrepreneurship Rates Skyrocketing, But Hiring Stalls

Published on Mar 7, 2011

Summary

Read our article, 'Entrepreneurship Rates Skyrocketing, But Hiring Stalls' at 'Time to Start Up,' the small business blog by BizFilings.
The newest generation of American workers may be the most entrepreneurial in more than a decade, new research by the Ewing Marion Kauffman Foundation suggests. Last year, American adults created 565,000 new businesses per month, according to the Kauffman Index of Entrepreneurial Activity, marking the highest rate of new business filings and entrepreneurial activity since the mid-1990s tech boom. However, while the rate of new startup activity is certainly encouraging news in the midst of a slow economic recovery, the data suggest that many of these new companies are solo ventures or have been limited in hiring activity. The report also found the quarterly employer rate among these firms to have fallen to 0.1 percent, down from 0.13 percent in 2007. "Far too many founders are choosing jobless entrepreneurship, preferring to remain self-employed or to avoid assuming the economic responsibility of hiring employees," said Carl Schramm, president and CEO of the Kauffman Foundation. While the decline in employment opportunities over the past few years has certainly contributed to the jump in entrepreneurship, another recent survey by Employers Holdings suggests it may also be a generational phenomenon, as nearly half of Generation Y respondents claimed they plan to start a business within the next five years, compared to only 35 percent of Gen X members.