Who Started New Businesses in 2013?
In a survey titled “Who Started New Businesses in 2013“, and conducted with companies recently formed using LegalZoom:
- Thirty-seven percent of new business owners said they had encountered no difficulties in forming or running their companies, a 3 percentage point decrease from 2012. However, of those who did cite difficulties, 36 percent of new business owners listed unpredictability and 28 percent named lack of access to credit – down a whopping 19 and 17 percentage points, respectively, from 2012.
- Personal savings as a means for funding the startup jumped from 66 percent in 2012 to 86 percent in 2013. Other funding sources included credit cards at 16 percent (10 percent in 2012), retirement savings at 8.5 percent (6.5 percent in 2012) and bank or home equity loans at 6.5 percent (4.5 percent in 2012).
- Survey findings also showed that businesses with one to four employees increased from 25 percent in 2012 to 26.5 percent in 2013. Twelve percent of the respondents had revenues above $100,000, a 4 percentage point increase over 2012.
- Further, startups with revenue below $50,000 dropped from 82 percent in 2012 to 77.5 percent in the most recent survey.
- Overall, the survey showed nominal shifts in age composition of the sample between 2012 and 2013, with slightly fewer entrepreneurs aged 18-29 and 50-59, and slightly more aged 30-39 and 60+.
- In 2012, 44.7 percent of respondents had previously started businesses, as compared to 41.4 percent in 2013. Among those who had previously started a business, entrepreneurs who had started more than one other company dropped from 52 percent to 48 percent.
Declining Business Dynamism in the U.S. High-Technology Sector
While the nation’s economy has seen significant overall improvement since the end of the Great Recession, economic indicators continue to paint a mixed picture, and several long-term challenges loom over the future. A new white paper from the Ewing Marion Kauffman Foundation shows sustained declines in business dynamism across a wide swath of the U.S. economy, including the high-tech sector that has been critical for sparking economic growth in recent decades.
The report found indicators of sluggish high-tech entrepreneurship and business dynamism after 2000. The slowdown was particularly evident in the declining trends of both job creation and job destruction from about 2004 onward. Taken together, job creation and job destruction are indicators of the business churning associated with dynamic economic activity.
The study of the high-tech sector draws from industries with very high shares of workers in the “STEM” occupations of science, technology, engineering and math. In the 1990s, the share of young, high-tech firms was rising, even as the proportion of young firms was declining in the overall economy. It’s time to recognize a new way forward for the high-tech sector would be the inclusion of the arts in start up teams to produce STE[+a]M for the sector.
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