More Related Content Similar to Startup Activity in America -- A Look at Startup Policy and the Kauffman Index (20) More from Arnobio Morelix (6) Startup Activity in America -- A Look at Startup Policy and the Kauffman Index1. © 2013 Ewing Marion Kauffman Foundation
www.kauffman.org
© 2013 Ewing Marion Kauffman Foundation
Startup Activity in America
Jason Wiens & Arnobio Morelix
Ewing Marion Kauffman Foundation
August 31, 2016
2. © 2013 Ewing Marion Kauffman Foundation
Young Firms Create the Most Jobs
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NetJobCreation
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Age 0-5 Age 6-10 Age 11+
3. © 2013 Ewing Marion Kauffman Foundation
Startups Create Jobs and…
Spur innovation, and
Provide paths to upward economic mobility, and
Make the U.S. economy dynamic.
4. © 2013 Ewing Marion Kauffman Foundation
Understanding the Kauffman Index of
Entrepreneurship Series
• Go-to set of indicators
o “Jobs Report” for unemployment rate and labor market health
o Consumer Price Index for inflation rate and changes in prices
• Kauffman Index: set indicators to measure all things
entrepreneurship
5. © 2013 Ewing Marion Kauffman Foundation
3 Distinct Aspects of Entrepreneurship
6. © 2013 Ewing Marion Kauffman Foundation
Kauffman Index of Startup Activity
7. © 2013 Ewing Marion Kauffman Foundation
4 Takeaways from the Kauffman Index of
Startup Activity
• Startup Activity is on the Rise
o Increased for the second year in a row after reaching its lowest level in the past
two decades only two years ago
o Increase in 23 out of 40 largest metros and in 30 of the 50 states
o 889,000 jobs created by new establishments in the last quarter of 2015 alone
• highest job creation number by new establishments since early 2008
• 4 Takeaways
o 1) New Face of the American Entrepreneur
o 2) Return of Opportunity Entrepreneurship
o 3) Geography of Startup Activity
o 4) Startup Great Recession Hangover and Long-Term Decline
8. © 2013 Ewing Marion Kauffman Foundation
1) New Face of the American Entrepreneur
• Narrowing Startup Gender Gap
o Rate of new entrepreneurs for women is the highest since 1996
o Startup gender gap is still wide, it has narrowed in the latest year
• from 0.22% in 2014 to 0.26 in 2015 for females
• 0.42% for males
• Increasing Racial Diversity Among New Entrepreneurs
o New entrepreneurs from racial minority backgrounds (e.g., Asian, Black, Latino,
Native-American)
• 1996: 23% (2 in 10 new entrepreneurs)
• 2015: 40% (4 in 10)
9. © 2013 Ewing Marion Kauffman Foundation
2) Return of Opportunity Entrepreneurship
• In 2015, the share of opportunity entrepreneurs was 84
percent – 10 percent points higher than it was in 2011 in
the aftermath of the Great Recession
10. © 2013 Ewing Marion Kauffman Foundation
3) Geography of Startup Activity
Metro Areas
• Highest Startup Activity – 2016
Rankings
1. Austin
2. Miami
3. Los Angeles
4. San Francisco
5. Las Vegas
• Biggest positive shift in ranks
from 2015 to 2016 were:
1. Orlando (33 to 21)
2. Kansas City (29 to 18)
3. Cincinnati (31 to 24)
4. Nashville (23 to 16)
5. Detroit (35 to 30) and San
Francisco (9 to 4)
11. © 2013 Ewing Marion Kauffman Foundation
3) Geography of Startup Activity
Larger States
• Highest Startup Activity – 2016
Rankings
1. Texas
2. Florida
3. California
4. New York
5. Colorado
• Biggest positive shift in ranks
from 2015 to 2016 were:
1. New Jersey (18 to 7)
2. Michigan (19 to 11)
3. Minnesota (24 to 21)
12. © 2013 Ewing Marion Kauffman Foundation
3) Geography of Startup Activity
Smaller States
• Highest Startup Activity – 2016
Rankings
1. Montana
2. Nevada
3. Wyoming
4. Oklahoma
5. Alaska
• Biggest positive shift in ranks
from 2015 to 2016 were:
1. Oregon (22 to 15)
2. Oklahoma (8 to 4)
3. North Dakota (11 to 7)
13. © 2013 Ewing Marion Kauffman Foundation
4) Startup Great Recession Hangover
• Still below peak preceding Recession drop
o Long Great Recession hangover in startup activity
14. © 2013 Ewing Marion Kauffman Foundation
Challenge: Fewer Americans Are Starting
Businesses
15. © 2013 Ewing Marion Kauffman Foundation
Challenge: Death Rates Are Increasing
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16. © 2013 Ewing Marion Kauffman Foundation
Good Policy Can Overcome Challenges
1. Welcome Immigrants
2. Reduce and Eliminate Barriers to Entry
3. Develop Human Capital
17. © 2013 Ewing Marion Kauffman Foundation
Welcome Immigrants
18. © 2013 Ewing Marion Kauffman Foundation
Reduce and Eliminate Barriers to Entry
Occupational Licensing
• Apply the appropriate protection at minimal burden
Non-Compete Agreements
• Ban
• Narrow the scope
• Disclose earlier
• Educate workers
Opportunity Cost of Trying
• The opportunity cost of trying—not insufficient funds—is a primary
barrier to starting a new business.
19. © 2013 Ewing Marion Kauffman Foundation
Develop Human Capital
20. © 2013 Ewing Marion Kauffman Foundation
Consider Kauffman a Resource
Entrepreneurship Policy Digest
www.kauffman.org/policydigest
Kauffman Index of Entrepreneurship Series
www.kauffmanindex.org
Jason Wiens Arnobio Morelix
Policy Director Senior Research Analyst
jwiens@kauffman.org amorelix@kauffman.org