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The Looming Entrepreneurial Boom: How Policymakers Can Renew Startup Growth

January 1, 2016

Entrepreneurship drives economic growth, propels job creation, and creates opportunities for upward economic mobility. Yet, fewer Americans are starting businesses today than in the past, and overall, the economy has been growing slower than in the post-recession periods of decades prior.Seeing these trends in 2014, the Kauffman Foundation announced a two-year initiative to develop new ideas for how to spur broad-based economic growth and opportunity through entrepreneurship. The result is the New Entrepreneurial Growth Agenda, a collection of essays written by the nation's leading researchers and policy experts offering recommendations for how national, state, and local governments can foster entrepreneurship. These essays are rich in content and cover myriad issues that affect entrepreneurship and vice versa, from technology creation and destruction, to inequality, talent, and education improvements, to a focus on cities, overall policies, and politics.We commend them to you and look forward to robust debate and, ultimately, the implementation of policy that helps entrepreneurs and spurs growth.

Sources of Economic Hope: Women's Entrepreneurship

November 19, 2014

This report suggests that accelerating female entrepreneurship could have the same positive effect on the U.S. economy that the large-scale entry of women into the labor force had during the 20th century. While women represent more than half of the educated U.S. population, they have far lower levels of participation in growth-oriented entrepreneurship than men do. Women-owned businesses account for only about 16 percent of the nation's employer firms and, among high-growth firms, they typically account for fewer than 10 percent of founders.

The Return of Business Creation

July 1, 2013

Freshly released government data show that new business formation rebounded in 2011, after four years of decline, from the depths of the Great Recession. This is a welcome development -- new businesses are the engine of job creation in the United States economy and an important source of innovation and productivity. Perhaps most importantly, the rise in new business formation between 2010 and 2011 was geographically dispersed throughout the United States.While the rise of new business creation in 2011 is a significant development -- it is the first annual gain in five years and the largest percentage annual increase in nearly a decade -- the bulk of this paper examines two classes of new businesses that most closely resemble entrepreneurship: companies less than one year old with one to four employees and those with fine to nine. This analysis finds that the smallest of these new firms represent most of the increase in firm formation in 2011:* New companies with one to four employees comprise the vast majority of new businesses formed each year, accounting for, on average, 86 percent of new firms since the late 1970s in the BDS data. * Job creation at new businesses of all sizes increased by 4.3 percent, and rose by 5.4 percent in new companies with one to four employees, reversing four consecutive years of decline for those smallest companies. * Companies less than one year old with one tofour employees have created, on average, more than 1 million jobs per year over the past three decades; those with five to nine employees have added, on average, half a million jobs per year. * With a promise of more detailed analysis infuture reports, this paper presents maps that illustrate the increased share of new business formation in most states and metro areas across the nation.

Give Me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa

February 1, 2013

The idea of visas for immigrant entrepreneurs has bounced around the country for many years, and even has been introduced into Congress on more than one occasion. The most recent is Startup Act 3.0, a bipartisan bill recently introduced into the U.S. Senate that, among other things, includes a Startup Visa. In this current incarnation, the new Startup Visa would make available a fixed pot of 75,000 visas for individuals who start companies. Initial eligibility would be restricted to individuals who already are in the United States on either H-1B visas or F-1 student visas. Once the Startup Visa is issued, further requirements are imposed in the first year. During that time, the entrepreneur must register a business, employ at least two full-time, non-family employees, and invest or raise an investment of at least $100,000. If, after one year, those requirements are met, the entrepreneur gets three additional years on the visa. During that three-year period, the entrepreneur must employ at least five full-time, non-family employees. The original two employees count toward these five, which means the business essentially must hire one person per year after the first year of operation. At the end of three years, the entrepreneur may apply to have the conditional status removed.This report attempts to estimate the impact on job creation that enactment of such a Startup Visa would have. Calculations suggest that a Startup Visa could create anywhere from 500,000 to 1.6 million jobs over the next ten years. Because of the assumptions and methods used, these estimates are considered very conservative, low-end estimates.

Cost and Access Challenges: A Comparison of Experiences Between Uninsured and Privately Insured Adults Aged 55 to 64 With Seniors on Medicare

June 4, 2012

Examines trends in the prevalence of unmet medical needs or delayed care due to cost and problems paying medical bills or buying prescription drugs among uninsured and privately insured 55- to 64-year-olds compared with among Medicare beneficiaries.

Financialization and Its Entrepreneurial Consequences

March 23, 2011

Examines the financial sector's rise in relative economic importance and its impact on science and engineering employment and entrepreneurship. Explores new firm formation and performance and capital allocation under a scenario with a smaller sector.

Neutralism and Entrepreneurship: The Structural Dynamics of Startups, Young Firms and Job Creation

September 7, 2010

Based on data since 1977, analyzes how the structural dynamics of firm formation, exit, and accumulation suggests that firm formation has been largely constant and new and young companies' share of net job creation is a stabilizing force in the economy.

High-Growth Firms and the Future of the American Economy

March 9, 2010

Examines data on the small number of top-performing and young high-growth firms that account for a disproportionate share of job creation. Calls for policies that promote high-growth entrepreneurship, including removing taxes and regulations impeding it.

Exploring Firm Formation: Why Is the Number of New Firms Constant?

January 13, 2010

Explores the factors behind the constant number of new firms started each year, including the relatively steady rate of employment turnover creating a supply of potential entrepreneurs. Considers implications for economic research and policy making.

Where Will the Jobs Come From?

November 5, 2009

Based on 2006-07 data, analyzes net new job creation by firm age rather than size. Highlights the potential role of new and young firms under five years old in an economic recovery and considers policy implications.

The Coming Entrepreneurial Boom

June 18, 2009

Based on the Kauffman Firm Survey, examines trends in entrepreneurial activity in 1996-2007 by age group, together with demographic trends. Considers implications for the outlook for entrepreneurial activity after the 2008-09 recession.

The Economic Future Just Happened

June 9, 2009

Explores the impact of recessions and bear markets on business formation and the survival of start-ups, patterns in the founding years, and the vulnerability of start-up jobs in downturns compared with the overall economy. Considers contributing factors.