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On the Rise: Entrepreneurial Optimism Is Growing

On the Rise: Entrepreneurial Optimism Is Growing
Credit: Baramee Thaweesombat/Shutterstock

The popularity of owning and operating a business continues to grow, new research finds.

There are now 24 million entrepreneurs in the United States, which represents 14 percent of the working-age population — the highest rate recorded since 1999, according to a study by Babson College and Baruch College.

Overall, 36 percent of entrepreneurs operate in the business service sector, which includes knowledge and service-based businesses, while 9.4 percent are starting medium- or high-technology businesses.

The research also revealed that 6.5 percent of entrepreneurs are starting businesses within organizations, which the study's authors said is an indication that entrepreneurial initiatives within larger corporate environments coexist alongside independent startups. 

The study not only shows a high level of current entrepreneurial activity, but also high optimism about the future, said Donna Kelley, the study's lead author and a professor of entrepreneurship at Babson College. [Ready to Start a Business? Advice You Need to Hear ]

"Entrepreneurial growth depends on people who see opportunities and have intentions to get started," Kelley said in a statement. "The greater optimism we see in the U.S. signals high support for entrepreneurs, and the increase in job ambitions clearly indicates the potential for entrepreneurship to make major contributions to the U.S. economy."

The research found that entrepreneurial optimism is the highest it's been since the annual study debuted in 1999. More than half of the U.S. population thinks there are currently good opportunities for starting a business. Moreover, just 30 percent fear failure — down from a high of 32 percent in 2012.

The increased entrepreneurial activity could be a huge driver of new jobs. The study showed that nearly one-quarter of U.S. entrepreneurs expect to employ 20 or more people in the next five years — up from 16 percent in 2013. In addition, nearly 60 percent of 18- to 24-year-olds and 46 percent of 25- to 34-year-olds expect to hire at least six employees by 2020.

Even startups that are single-operated ventures still bring value to the overall economy, according to the research.

"These businesses still create value because they allow people to create their own jobs, and they serve their communities by meeting demand for needed products and services," the study's authors wrote. "Entrepreneurship of all kinds is therefore beneficial."

One area in which U.S. entrepreneurs are falling short is in international activity, with just 15 percent having some presence overseas. The study's authors believe U.S. entrepreneurs should be making a greater effort in this area.

"Global trade can enhance the perspective and competitiveness of U.S. entrepreneurs, which will serve them well in building future sustainable businesses," the study's authors wrote. "It will also provide better insulation from incoming global competition."

The study, the Global Entrepreneurship Monitor, launched in 1999 as a joint venture of Babson College and the London Business School. It started with 10 participating countries, and the project has since expanded to include 73 countries.

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.

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