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Kauffman Foundation updates indicators, State of Entrepreneurship Address

February 28, 2019

Too many communities continue to focus on business attraction in lieu of entrepreneurial support, according to the Kauffman Foundation leadership in their 10th annual State of Entrepreneurship Address. To increase the focus on entrepreneurs, the foundation indicated it plans to help 200 communities across the country, and 200,000 entrepreneurs in these communities over the next five years, with an emphasis on the middle of country and underrepresented populations, but it did not provide specific details on how it would provide that assistance. As part of the effort, Kauffman also released a checklist highlighting barriers and breakthroughs in entrepreneurship, as well as ways individuals can help grow more inclusive and innovative local economies. In the week leading up to the address, Kauffman also introduced four indicators at the national, state, and metropolitan levels as part of its new approach to tracking early-stage entrepreneurship.

The four Kauffman indicators of early-stage entrepreneurship are:

  • Rate of new entrepreneurs: The broadest measure possible for business creation by population.
  • Opportunity share of new entrepreneurs: The percentage of new entrepreneurs who created a business out of choice instead of necessity.
  • Startup early job creation: The number of jobs created in the first year of business.
  • Startup early survival rate: The rate of survival in the first year of business.

These indicators differ from those previously developed by the Kauffman Foundation in 2015, 2016, and 2017. In those years, Kauffman measured startup activity, growth entrepreneurship, and main street entrepreneurship separately, and then combined these metrics. Notably, the new indicators do not differentiate between types of startups and small businesses, which may in turn limit their usefulness for groups focusing specifically on high-growth companies and technology-based businesses as opposed to entrepreneurship more broadly.