Start-Ups Make Huge Contribution to the Economy

Last year saw the highest rate of entrepreneurial activity in the US since 1999: in 2012, 13% of Americans were starting or running their own businesses according to the Global
Entrepreneurship Monitor, an annual report published by Babson College and Baruch College.
In American recessions, increasing unemployment is often offset as the ranks of the selfemployed swell. New companies account for 70% of gross job creation and disproportionately
contribute to net job creation, according to the Kauffman Index of Entrepreneurial Activity. Women in particular have made up a significant portion of the self-employed in the
most recent recession. Since 2006, the number of immigrants starting new businesses has also increased sharply, with the result in 2012 that immigrants are twice as likely as nativeborn
Americans to start a new business.
So far, funding has matched the pace. Angel investors in particular have grown in number as the technology industry, has continued to grow rapidly with few signs of slowing down.
However, more recent data shows the pace of start-up growth might be slowing down.
The Kauffman Index reported its annual numbers in April, which showed that fewer Americans actually started a new company in 2012 than in 2011. Though other sources say that
entrepreneurs, on average, reported they were starting new companies in 2012 because they saw opportunity rather than had no other job prospects, steady economic improvement is
chipping away at the nation’s base of would-be entrepreneurs.
In addition, many of the companies that launched since the Great Recession began in 2008 are hiring or creating more jobs in their communities. So whether the rate of America’s
entrepreneurial activity is breaking records or leveling off, there’s some good economic news to cap off your Memorial Day weekend. To learn more about NFS Leasing, please visit

Click here for Funding Your Start-Up online.


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