Silicon Valley venture-backed tech startups have had a wildly successful twenty years, coming to dominate the markets. But tech remains a relatively small sector in terms of the total number of businesses and employees, and by many measures entrepreneurship and small business have been in relative decline in the US during the 2000’s.
Covid accelerated many pre-existing trends, like the shift to remote work. But it reversed other trends, and seems to have led to a revival in entrepreneurship broadly.
A new report from the Kauffman Foundation, “2021 NATIONAL REPORT ON EARLY-STAGE ENTREPRENEURSHIP IN THE UNITED STATES“, illustrates this reversal, showing that the rate of new entrepreneurs is the highest its been since at least 1996.
This wasn’t all good at first- in 2020, the share of “necessity entrepreneurs” also reached record highs. These are people who start a business because they can’t get the job they want, not because they expect their business to be wildly successful. But in 2021, the rate of new entrepreneurs remained high while the share of “necessity entrepreneurs” and “opportunity entrepreneurs” returned to their normal balance.
Another good sign is that the share of businesses surviving at least a year is also at record levels:
More cracks in the Great Stagnation.