The document, officially titled the “Kauffman Index of Main Street Entrepreneurship,” measures the activity of United States businesses that are more than five years old with less than fifty employees, tracking them from 1997 to 2016. Here’s what they found.
Entrepreneur Activity Is Higher Than It Has Been
Since the Great Recession, levels of entrepreneurship, measured across the nation, have never been higher. Here’s what the report had to say:
But Small Businesses Are Getting Smaller
Again from the index: This increase was primarily driven by a jump in the business survival rates, which reached a three-decade high of 48.7 percent. This means almost half of new businesses are making it to their fifth year of operation. Greater longevity for startup businesses marks a major turnaround from the Great Recession, which saw the business survival rate drop to a low of 42.9 percent in 2011. Survival rates have increased every year since then.” The density of the businesses themselves remains the same, but the individual businesses are ranking slightly smaller. And, when taking a closer look, the metro areas are attracting largest amounts of those businesses: It appears that small businesses are increasingly headed towards larger cities while themselves shrinking slightly. Still, their presence in terms of actual numbers remains as strong as ever. The five metros with the highest Main Street entrepreneurship activity are Pittsburgh, Boston, Portland, San Francisco and Washington, D.C. The first-five-years survival rate of businesses in the 40 largest metros ranges from an estimated 45.44 percent in Orlando to 54 percent in Boston.”
