National Report on Early-Stage Entrepreneurship in the United States: 2020

Abstract

The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship.

This report presents four indicators that track early-stage entrepreneurship for the years 1996–2020: rate of new entrepreneurs reflects the number of new entrepreneurs in a given month, opportunity share of new entrepreneurs is the percentage of new entrepreneurs who created their businesses out of opportunity instead of necessity, startup early job creation is the total number of jobs created by startups per capita, and startup early survival rate is the one-year average survival rate for new firms. National trends are reported for the four indicators as well as some demographic trends for the rate of new entrepreneurs and opportunity share of new entrepreneurs.

The rate of new entrepreneurs was substantially higher in 2020 than in 2019 or in previous years, reflecting more transitions into entrepreneurial activity, broadly defined, among the population during pandemic conditions. At the same time, the opportunity share of this activity plummeted to the lowest share in 25 years, indicating that many of these transitions were undertaken by people with few other options for economic engagement.

Keywords: Kauffman Indicators, entrepreneurship, early stage, business creation, entrepreneur