Startup Activity Remains Strong Among Older Americans

While the rate of new business creation dipped last year, entrepreneurship growth was highest among American adults in the 45-to 54-year-old age category, show new statistics released March 19 by the Ewing Marion Kauffman Foundation.

The Kauffman Index of Entrepreneurial Activity found that, overall, 0.32 percent of American adults created a business per month in 2011 – a 5.9 percent drop from 2010, but still among the highest levels of entrepreneurship over the past 16 years.  For 45-to 54-year-olds, the rate rose from 0.35 percent in 2010 to 0.37 percent in 2011.

The youngest group (aged 20 to 34) also showed a slight increase. In contrast, the 35-to 44-year-old and 55-to 64-year-old groups experienced declines in entrepreneurial activity rates from 2010 to 2011.

“Entrepreneurial activity rates reflect changing demographics,” said Robert W. Fairlie, the study’s author and director of the master’s program in applied economics and finance at the University of California, Santa Cruz. “Despite a slight decline in entrepreneurial activity rates this year, the share of new 55-to 64-year-old entrepreneurs has risen from 14.3 percent in 1996 to 20.9 percent in 2011 due to an aging U.S. population.”

Other key findings:

•   By industry, construction had the highest entrepreneurial activity rate at 1.68 percent,  followed by the services industry at 0.42 percent. The manufacturing startup rate was the lowest among all industries, with only 0.11 percent of non-business owners starting businesses per month during 2011.

•   Entrepreneurial activity decreased slightly for both men and women. For men, the entrepreneurial activity rate decreased from 0.44 percent in 2010 to 0.42 percent in 2011, reversing an upward trend over the past few years. The female entrepreneurship rate decreased from 0.24 percent to 0.23 percent.

•   Among the United States’ 15 largest metropolitan statistical areas, Los Angeles had the highest entrepreneurial rate (580 per 100,000 adults) in 2011. Chicago and Detroit had the lowest rates at 180 per 100,000 adults.

You can read the Kauffman Foundation’s news release about the 2011 Index results here.

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About Lynne Strang

I'm a writer who blogs about 40-and-older business owners. I am also the author of "Late-Blooming Entrepreneurs: Eight Principles for Starting a Business After Age 40." Outside of work, I enjoy reading, cooking, vegetable gardening and exercise (especially cycling).
This entry was posted in Business, Career Changes, entrepreneurs, Entrepreneurship, Leadership, Retirement, Success and tagged . Bookmark the permalink.

6 Responses to Startup Activity Remains Strong Among Older Americans

  1. Construction, services, manufacturing are mentioned. I wonder if these numbers reflect MLMs at all.

    • lbstrang says:

      Good question. I didn’t see them mentioned in the section of the Index that discusses “Entrepreneurial Activity by Industry.” Maybe someone from Kauffman will let us know!

  2. It’s interesting to see how changing demographics reflects on entrepreneurial activity. Great stats.

  3. lbstrang says:

    It really is interesting– but to me, it seems like the demographic trends are just part of the picture. We aren’t just living longer; we’re also living “better,” thanks to advancements in medicine, technology and other areas.

  4. Mike Wilson says:

    Even in these tough times, there are opportunities. It really makes sense that more seasoned people are pursuing them.

  5. lbstrang says:

    As they do, some of them are enjoying a happier lifestyle as a result.

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