2017 Entrepreneurship Mega-Trends
New research from the Kauffman Foundation digests data from startups and small business through 2016 to highlight major trends in America today.
Earlier in 2017, the Ewing Marion Kauffman Foundation published The State of Entrepreneurship 2017, “ZERO BARRIERS: Three Mega Trends Shaping the Future of Entrepreneurship.” We’ve found the resource to be an informative look from a fresh perspective; The Kauffman Foundation is located in Kansas City, Missouri, and is among the largest private foundations in the US. We encourage you to read the report (it’s a short 27 pages with charts). Here are our main takeaways.
New Demographics of Entrepreneurship and the US population.
The first mega trend highlighted by Kauffman is the shift in US demographics, and what it does (and should) mean for startups and small businesses. The US is growing older, while also growing more diverse. Currently, 36% of the US population is from racial minority backgrounds; by 2050, over half of the US population will be from racial minority backgrounds. Yet Kauffman found that 80.2% of entrepreneurs in America are white, and 64.5% are male- vastly different from the current overall US population. Diversity in startups is growing, but how can investment and foundations work to destroy those barriers to business creation and business growth to achieve more diversity & equality in entrepreneurship?
New Map of Entrepreneurship- moving past Silicon Valley.
Today, venture capital is more widely distributed than it has been throughout the past 30 years. According to the 2016 Kauffman Index of Growth Entrepreneurship, “The metros with the highest levels of [entrepreneurial] activity relative to their size… are Washington, D.C.; Austin, TX; San Jose, CA — usually considered the heart of Silicon Valley; Columbus, OH; and Nashville, TN”. That’s a lot further than only California, and it means that affordability and space are providing new opportunities for entrepreneurs across America, especially in urban areas. What this means for innovators in small towns and rural communities is less clear.
New Nature of Entrepreneurship- technology & job creation.
Technology and the changing nature of careers in America have begun to change the nature of entrepreneurship. For example, in 1962, Kodak (a major technology company at the time) surpassed $1 billion in sales and employed 75,000 people. In 2013, Facebook reached an equivalent amount of revenue in today’s dollars and employed approximately 6,300 people. If businesses are not creating as many jobs as they have in the past, what is this new role of companies, and how will it impact communities?
Automation, innovation in technology, and even the mainstreaming of crowdfunding or alternative financing channels like Kickstarter and Kiva Zip have all changed the nature of entrepreneurship.
The Kauffman Foundation has multiple initiatives and programs to help guide this new phase of business creation in America. Impact investing and venture capital, along with philanthropy, are ways that organizations and companies are choosing to directly support entrepreneurship in America and pave the road ahead.
