Main Street Entrepreneurship Activity Ramps Up Nationwide and in Most States and Metros, Annual Kauffman Index Reports

Sharp uptick in small business survival rates drove increase in Main Street activity rates which exceeded pre-recession levels for the first time

KANSAS CITY, Mo.--()--The nation as a whole and most states and metros are experiencing higher rates of small business activity, according to the 2016 Kauffman Index of Main Street Entrepreneurship, released today by the Ewing Marion Kauffman Foundation.

Nationally, there was a sharp uptick in the survival rate of businesses in the last year. At the same time, Main Street entrepreneurship activity gained ground in 47 states and 38 of the 40 largest metros.

“The Main Street Entrepreneurship Index provides additional evidence that U.S. small business activity has rebounded from the downturn and continues to gather strength,” said Arnobio Morelix, senior research analyst at the Kauffman Foundation. “More new businesses are making it through their first five years of operation. While this could indicate that a lack of dynamism is allowing less-productive firms to hang on longer, overall the entrepreneurial increases bode well for the established, small businesses that underpin much of our economy.”

The Kauffman Index of Main Street Entrepreneurship relies on three indicators to measure U.S. entrepreneurship across national, state and metro levels:

  • The Rate of Business Owners in the economy, calculated as the percentage of adults owning businesses as their main jobs. Although the Rate of Business Owners also captures owners of very large firms, it is overwhelmingly represented by owners of small businesses.
  • The Survival Rate of firms, calculated as the percentage of firms that remain in operation throughout their first five years.
  • The Established Small Business Density, measured as the ratio of established (five years or older) small (fewer than 50 employees) businesses to the total number of firms.

Combined, these three indicators provide a view of small business activity in the country across national, state and metro-area levels. These businesses make up a large share of U.S. firms. U.S. Census Bureau business statistics show that established small businesses represent almost 68 percent of all employer firms in the country.

The report also provides demographic information, including state and metro business ownership rates for females, Millennials and Boomers. Read the complete findings and access interactive charts at here.

The Kauffman Index of Main Street Entrepreneurship captures business activity in all industries and is based on both a nationally representative sample size of roughly 900,000 responses each year and the universe of all employer businesses in the United States, in a dataset that covers approximately five million businesses.

The index provides policymakers, economic development leaders and entrepreneurship ecosystem builders with data-driven insights about entrepreneurial communities, which they can use to accomplish their goals.

About the Kauffman Index of Entrepreneurship Series

The Kauffman Index of Entrepreneurship series is an umbrella of annual reports that measure U.S. entrepreneurship across national, state, and metro levels. Rather than focusing on inputs, the Kauffman Index focuses primarily on entrepreneurial outputs—the actual results of entrepreneurial activity, such as new companies, business density, and growth rates.

About the Kauffman Foundation

The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that aims to foster economic independence by advancing educational achievement and entrepreneurial success. Founded by late entrepreneur and philanthropist Ewing Marion Kauffman, the Foundation is based in Kansas City, Missouri, and has approximately $2 billion in assets. For more information, visit www.kauffman.org, and follow the Foundation on www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.

Contacts

Goldin Solutions
John Eddy, 212-319-3451 x648
john@goldinsolutions.com
or
Kauffman Foundation
Barb Pruitt, 816-932-1288
bpruitt@kauffman.org

Contacts

Goldin Solutions
John Eddy, 212-319-3451 x648
john@goldinsolutions.com
or
Kauffman Foundation
Barb Pruitt, 816-932-1288
bpruitt@kauffman.org