The numbers are compelling, but perhaps not surprising: entrepreneurs make our economy - period. Our economy isn’t driven by social programs, or by AIG/Lehman Bros/Morgan Stanley/General Motors or any other combination of banks or big business. The concept that “What’s good for GM is good for America” has been turned on it’s head: ”What’s good for America is good for GM”! And, what IS good for America? NEW BUSINESS CREATION! The Kauffman Foundation compiled statistics that make this irrefutable. Among them:
- All net job growth in America from 1980 to 2005 came from companies less than 5 years old.
- One-third of all new jobs come from the creation of new businesses. That doesn’t factor in the job creation from companies that are just a few years old.
- in 2007 - which wasn’t a “great” year economically speaking - 495,000 new businesses were created every month. During that year one-third of 1% of adults created a business per month.
- 40% of young people between the ages of 8 and 21 would like to start a business someday - or already have.
- New businesses are 3% more productive than mature businesses. And, 5-year old companies are 5% more productive than mature businesses.
- On average, 75% of startup capital comes from equal parts owners equity and debt, including credit cards.
- Angel investors average 27% return on startup investment.
If we are serious about economic recovery, we better get serious about helping entrepreneurs and would-be entrepreneurs start new businesses. Need a job? Start a business.
