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Global Entrepreneurship Monitor says US entrepreneurship is on the rise

September 21, 2023

Those who gather data know that the results collected in 2020 during pandemic shutdowns do not reveal actual trends. This phenomenon was the case for a recent survey by Babson College researchers for the Global Entrepreneurship Monitor Adult Population Survey (GEM APS). They found that rates of entrepreneurship, which had been on the rise since 2015, dropped in 2020. However, their newest research shows an upward trend in 2021 and 2022, when the U.S. had the highest levels of entrepreneurial activity since their first survey in 1999. In 2022, 19% of working-age adults were in the process of running a business or were running a company less than 42 months old.

The current U.S. survey found such trends a rise in manufacturing and logistics companies since the pandemic, an increasing focus among entrepreneurs on their businesses' social and environmental impacts, and a rising rate of companies bringing innovative new products to market.

The rise of manufacturing and logistics since the pandemic

A supply chain survey from Capgemini published in 2020 found that 65% of companies in the U.S. saw a need to shift their supply chain strategies after the pandemic significantly. Additionally, their research found that 47% of organizations are accelerating their investments in automation and 39% in robotics, and that companies are investing more in IoT and AI.

The GEM APS study showed that entrepreneurs stepped in to create products and services to fill this need. Nineteen percent of all U.S. startups were in manufacturing and logistics in 2022, an increase from 12 percent in 2020. Women entrepreneurs played a significant role in starting manufacturing companies: in 2022, they created these companies at twice the rate of men.

Increasing focus on social and environmental impact

More than two-thirds of early-stage entrepreneurs put social and environmental impact above profits: 72% of women entrepreneurs and 73% of 18-34-year-old entrepreneurs say they prioritize social and environmental impacts of their companies over profit. These groups — 56% of women entrepreneurs and 62% of 18-34-year-old entrepreneurs — are also more likely to act on those concerns and weave environmental responsibility into their businesses.

Likewise, 60% of women and 63% in the younger age range reported taking steps to ensure a positive social impact of their businesses.

The survey revealed a recent gender gap in the rate at which entrepreneurs take action to decrease the environmental impact of their businesses. The rate at which male entrepreneurs took action to reduce the environmental impact of their companies stayed the same in 2021 and 2022, while the rate of female entrepreneurs doing so increased by 30% from one year to the next.

Gen Z entrepreneurs also tend to be committed to reducing the environmental impacts of their companies. The survey found that this generation was one-third more likely to have taken steps to reduce the environmental impact of its businesses than those aged 35-64.

However, the group taking the most action to reduce their companies' environmental impact were those entrepreneurs who launched innovative products. They were one and a half times more likely to take proactive steps to ensure their businesses were not having negative effects than were entrepreneurs starting new businesses that offered existing products or services.

Innovation and use of technologies in commercialization

The authors report that 40% of total entrepreneurial activity involved bringing something new to market, nearly double the rate in 2020. The authors concluded that the rapidly increasing rate of innovative new companies, who they had also found leading the commitment to the positive social and environmental impacts of their companies, indicates a strong trend toward social and environmentally responsible startups in the future.

entrepreneurship, manufacturing, environment, innovation, commercialization