There were a record number of entrepreneurs in the US in 2022, with young adults leading the growth, according to a report released last week by Babson College and the Global Entrepreneurship Monitor.
The national report surveyed 2,000 adults in the summer of 2022 of all genders, races, ethnicities, and age groups, asking their thoughts about starting businesses.
The Global Entrepreneurship Monitor has conducted global reports on entrepreneurship every year since 1999.
The survey found that adults 18 to 24 years old engage in entrepreneurial activity — either owning a business or wanting to start one — almost twice as often as those 35 to 64 years old. In all, 19 percent of all the adults surveyed were starting or running a business that was less than 3 1/2 years old.
“It’s remarkable to see this record-breaking entrepreneurial activity, especially among young people, women, and innovators, who are not only reshaping the business landscape, but also propelling significant social and environmental advancements,” said Donna J. Kelley, the GEM US Team co-leader and Babson College Entrepreneurship professor.
The report also found high rates of entrepreneurship among Black people and Hispanics. Black people have the highest rate of entrepreneurial activity — 35 percent — followed by Hispanics at 27 percent and white people at 15 percent. Still, white entrepreneurs are much more likely to have an established business, one that has operated for over 42 months, than both Black and Hispanic entrepreneurs, the study found.
“Because the established business rate is lower, a policymaker might look at that and say, ‘Wow, this is actually something that we should look at, because perhaps our government program for our support of [Black and Hispanic entrepreneurs] is not as strong as it should be,’” said Jeffrey Shay, coauthor of the GEM report and professor of entrepreneurship at Babson College.
The US has the second-highest rate of female entrepreneurship, after the United Arab Emirates, and the third-lowest gender gap in early-stage entrepreneurial activity, just below Spain and Qatar, according to the report. Women made up 18 percent of those running a business or in the process of starting one.
Women and young entrepreneurs are more likely to focus on their companies’ social and environmental impact, the study found. Additionally, they are more likely to invest in energy-saving measures, reduce carbon emissions, ensure a diverse workforce, and prioritize human rights, according to the report.
Overall, 55 percent of entrepreneurs are focused on both sustainability and their company’s social impact.
“As we continue to navigate the ever-evolving business landscape, it will be important to continue to support and empower entrepreneurs, celebrate their achievements, and promote inclusive and sustainable entrepreneurship for a better future,” Kelley said.