Contact:
Barbara Pruitt, 816-932-1288, bpruitt@kauffman.org, Kauffman Foundation
(KANSAS CITY, Mo.) Feb. 16, 2009—With the economy leading the news 24/7, the nation’s leading source for economic research has compiled the most compelling statistics from its data treasure chest to feed a growing appetite for economic news. The data point to the critical role entrepreneurs play in the economy.
"We have conducted hundreds of new studies over recent years that have informed scholars, policymakers and business media about how entrepreneurs drive the economy and how policy impacts firm formation," said Carl Schramm, president and CEO of the Ewing Marion Kauffman Foundation. "This data compilation makes a powerful statement about what entrepreneurs bring to our economic well-being and what they can mean to recovery."
From job growth and startup statistics to the impact of immigrants and state standings, the Foundation’s most compelling facts and figures are presented below, along with links to the corresponding studies.
Hail to the Job Creators
More than one-third of job creation is due to the entry of new businesses.
Turmoil and Growth: Young Businesses, Economic Churning, and Productivity Gains, June 2008 
From 1980-2005, firms less than five years old accounted for all net job growth in the United States.
Business Dynamics Statistics Briefing: Jobs Created from Business Startups in the United States, January 2009
The Startup Phenomenon
In 2007, an average of 0.30 percent of adults created a new business each month, equaling about 495,000 new businesses per month.
Kauffman Index of Entrepreneurial Activity 1996-2007, April 2008
Nearly half—45 percent—of startups were established in the same state where U.S.-born tech founders received their education.
Education and Tech Entrepreneurship, May 2008
What do Microsoft, Disney, Genentech, McDonald’s, Southwest Airlines, Johnson & Johnson and Krispy Kreme all have in common?
All were founded in recessions, depressions or bear markets.
Entrepreneurs and Recessions: Do Downturns Matter?, December 2008
Entrepreneurs are the answer. Seventy percent of U.S. registered voters think the health of the economy depends on the success of entrepreneurs.
Luntz, Maslansky Strategic Research Survey (sample size: 816), September 2008
Let’s hear it for the next generation. Four in ten U.S. young people ages 8 to 21 have or would like to start their own business someday, and 63 percent agree that they have the ability to successfully start their own business.
Harris Interactive® Survey (sample size: 2,438), July/August 2007
The Demographics
Of new firms…
70 percent are men-owned; 30 percent are women-owned
81 percent are white-owned
9 percent are African-American-owned
6.6 percent are Hispanic-owned
4 percent are Asian-owned
5 percent are owned by Native Americans, Pacific Islanders and individuals of other racial groups
The Kauffman Firm Survey, March 2008
Think tech companies are founded only by 20-somethings? Think again. The average age of U.S.-born tech founders when they started their companies was 39. In fact, twice as many were older than 50 as were younger than 25.
Education and Tech Entrepreneurship, May 2008
In 2002, 6.5 million privately held, women-owned firms generated an estimated $940 billion in sales and employed 7.1 million people; however, women-owned firms still underperform men-owned firms.
Characteristics of New Firms: A Comparison by Gender, January 2009
Show Them the Money
Nearly 75 percent of most firms' startup capital is made up of equal parts owner equity and bank loans and/or credit card debt.
The Capital Structure Decisions of New Firms, November 2008
Angel investors participating in organized groups achieve an average 27 percent internal rate of return.
Returns to Angel Investors in Groups, November 2007
High-tech firms receive more outside equity investments in their first year of operations than any other type of company—on average, $31,216 compared with firms’ overall average of $7,000.
The Capital Structure Decisions of New Firms, November 2008
The Immigrant Force
In 2007, the immigrant rate of entrepreneurial activity—0.46 percent—was substantially higher than the native-born U.S. population—0.27 percent.
Kauffman Index of Entrepreneurial Activity 1996-2007, April 2008
Thirty-one percent of the engineering and technology companies founded from 1995 to 2005 had an immigrant as a key founder compared with the national average of 25.3 percent.
Education, Entrepreneurship, and Immigration: America’s New Immigrant Entrepreneurs, Part II (based on a survey of eleven technology centers), June 2007
Foreign nationals residing in the United States were named as inventors or co-inventors in 25.6 percent of international patent applications filed in the U.S. in 2006.
Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain: America’s New Immigrant Entrepreneurs, Part III, August 2007
Other Cool Stuff
Young businesses initially are 3 percent more productive than mature businesses; after five years, their productivity advantage increases to 5 percent.
Turmoil and Growth: Young Businesses, Economic Churning, and Productivity Gains, June 2008
Of 5,000 businesses started in 2004, a little more than 2 percent reported owning patents during their first year of operation, while nearly 9 percent reported having copyrights and 13.5 percent had trademarks.
The Kauffman Firm Survey, March 2008
These states take the cake. Massachusetts, Washington, Maryland, Delaware and New Jersey are leading the United States’ transformation into an entrepreneurial, knowledge- and innovation-based New Economy.
The 2008 State New Economy Index, November 2008