WHO ARE THE HAPPIEST ENTREPRENEURS IN AMERICA?
The happiness levels of American women entrepreneurs are surging as they assume the role of successful business owner, according to the 2013 Global Entrepreneurship Monitor (GEM) U.S. Report issued today by Babson College and Baruch College.
Established female business owners ranked their well-being more than twice as high as non-entrepreneurs and non-business owners.
“Unquestionably, people who run their own businesses in the United States are very satisfied with their lives,” commented the GEM U.S. Report’s lead author, Donna J. Kelley, Babson College Associate Professor of Entrepreneurship. “Women entrepreneurs show a substantial boost in well-being as their businesses mature, demonstrating the personal return on investment that comes with venturing into entrepreneurship. Our research found that the benefits of entrepreneurship extend beyond economic and social value. Clearly, entrepreneurship provides women a most satisfying career choice.”
One out of 10 women in the U.S. is starting or running a new business. This rate is higher than any of the other 24 developed economies measured in the Report.
Moreover, the proportion of women that want to grow their businesses by more than five employees in the next five years increased from 31 percent in 2012 to 36 percent in 2013.
Overall, there are an estimated 3.73 million American women with growth-oriented businesses.
In addition to studying total entrepreneurial activity levels, the GEM U.S. Report analyzed entrepreneurship among seniors and looked at the differences in entrepreneurship among four geographically diverse states: California, Michigan, New York, and Texas.
This unique entrepreneurship research, conducted in 70 economies worldwide, examines how many individuals are participating in entrepreneurship, the types of businesses they are starting or operating, and societal attitudes about entrepreneurship.
This is GEM’s 15th-annual survey of entrepreneurship around the world. With a decade and a half of data collection, GEM provides a comprehensive look at entrepreneurship on a global level over time, providing valuable insights for academics, policy makers, educators, and practitioners.
The GEM U.S. Report is authored by Babson professors Donna J. Kelley, PhD; Abdul Ali, PhD; Candida Brush, PhD; Andrew C. Corbett, PhD; and Mahdi Majbouri, PhD; with Thomas Lyons, PhD, and Edward G. Rogoff PhD, contributing from Baruch College.
Key Findings from the GEM U.S. Report
The U.S. continues to lead in entrepreneurship activity
- Nearly 13 percent of the U.S. population (an estimated 25 million Americans) was in the process of starting or running a new business—the highest entrepreneurship rate reported among 25 developed economies surveyed from North America, Europe, and Asia.
- An estimated 7.7 million of these entrepreneurs projected employing five or more people in the next five years.
- Most U.S. entrepreneurs start businesses to pursue an opportunity. Still, rates of starting businesses out of necessity are persistently higher than before the 2008 recession.
Upbeat Attitude: Americans are upbeat about the entrepreneurial environment
- 47 percent believe there are good opportunities for starting a business, the highest level reported since the Report began in 1999.
- 56 percent of Americans believe they have the capabilities to launch a business—a remarkably stable indicator despite recent fluctuations in the economic environment, and highest among the 25 developed economies assessed in the Report.
Impactful: U.S. entrepreneurs are planning to create jobs and are introducing innovative products and services
- 37 percent expect to employ six or more employees in the next five years.
- More than one-third say they offer innovative products or services to new customers with few competitors.
Internally Focused: U.S. entrepreneurs are missing opportunities for growth and globalization
- Only 11 percent report that more than 25 percent of customers come from outside the U.S.
- Less than 1 percent have more than 25 percent Canadian customers and only 2 percent have that many Mexican customers.
Motivated Women Entrepreneurs: One out of 10 women in the U.S. is starting or running a new business
- The U.S. has the highest rate of female entrepreneurship among the 25 developed economies assessed in the Report.
- There are an estimated 3.73 million American women with growth-oriented businesses.
- The proportion of women entrepreneurs who want to grow their businesses by more than five employees in the next five years increased from 31 percent in 2012 to 36 percent in 2013.
- Yet, gaps between women and men in entrepreneurship rates, intentions to start, and perceptions of opportunities are greatest in the 35–44 year-old age range. Men experience peak levels of entrepreneurship rates and opportunity perceptions compared to women in this age category.
Older Entrepreneurs Are Engaged: The U.S. has the highest rate of entrepreneurship among 55–64 year olds in the 25 developed economies surveyed
- Older entrepreneurs are supported by resources and positive attitudes. More than half come from the highest third of household income.
- They are equally likely as younger Americans to see entrepreneurial opportunities and are less risk averse.
- Older entrepreneurs are more confident in their abilities to start businesses than those 18–44 years of age.
The Happiness Factor: Adults with more positive well-being scores are much more likely to perceive entrepreneurship opportunities
- Happiness levels among women entrepreneurs surge as their ventures mature.
- Opportunity-based entrepreneurs are more satisfied with their lives, which they describe as “excellent” and “close to ideal”, than those who do not become entrepreneurs.
- Adult entrepreneurs with a positive outlook reported higher perceptions of entrepreneurial capabilities and lower fear of failure rates than those with lower well-being scores.
Entrepreneurship in Four States: In 2013, GEM looked at the entrepreneurship profiles of California, Michigan, New York, and Texas
- California: has many international entrepreneurs and reports high levels of gender equality; still, necessity-driven entrepreneurship rates are also high.
- Michigan: entrepreneurship tends to attract men and people in their mid-careers. It has more manufacturing, but less international activity than is nationally reported.
- New York: shows high levels of youth participation, with fewer women than men entrepreneurs and a thriving business service sector.
- Texas: has wealthy, educated entrepreneurs with high-growth ambitions and an international scope.
The Global Entrepreneurship Monitor (GEM) is a not-for-profit academic research consortium focused on making high-quality information on global entrepreneurship activity readily available to as wide an audience as possible. GEM is the largest single study of entrepreneurial activity in the world. Initiated in 1999 with 10 countries, GEM 2013 conducted research in 70 economies all over the world.
About Babson College
Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds™. The College is a dynamic living and learning laboratory, where students, faculty, and staff work together to address the real-world problems of business and society—while at the same time evolving our methods and advancing our programs. We shape the leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to create economic and social value. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought and Action® as the most positive force on the planet for generating sustainable economic and social value.