I ran into an economic statistic I’d been wondering about the other day, in, of all places, the Styles section of the Sunday Times.
The article is about people who try to start their own businesses and find out it’s harder to do than they’d imagined. Naturally this is set in the context of a lot of people losing their previous jobs so they’re treating unemployment as an opportunity. And this:
Indeed, since the dawn of the Great Recession, more Americans have started businesses (565,000 of them a month in 2010) than at any period in the last decade and a half, according to the Kauffman Foundation, which tracks statistics on entrepreneurship in the United States.
So there you go. In case you were wondering why more people aren’t using unemployment as an opportunity to start their own businesses and pursue some dreams, the answer is, they are - in record numbers for two years in a row. (Is it weird that the Obama administration isn’t doing more promotion of this fact?)
There’s a little more to the story. Following the sourcing on the Times article I arrive at a summary of the Kauffman study that points out that as small businesses go, these are the smallest business - go-it-alone ventures.
However, while the economy and its high unemployment rates may have pressed more individuals into business ownership, most of them are going it alone, rather than starting companies that employ others.
It is probably significant that while the Times is writing about how difficult people are finding it to run the business they always wanted to start, the data shows that people starting businesses aren’t hiring any help. Kauffman calls it “jobless entrepreneurship.”
The full Kauffman Index of Entrepreneurial Activity report (pdf) is a little daunting to read through even though it is well illustrated, but the fact sheet (pdf) and interactive graphic pages are interesting and digestable.
I began poking through this data mostly out of curiosity, but now I wonder how much of it we’ll see mixed into the coming debates over the payroll tax and the competing jobs bills.