New research shows impact of pandemic on U.S. entrepreneurs
The Global Entrepreneurship Monitor report, which surveyed more than 2,000 American adults in August 2020, provides a comprehensive overview of the impact of COVID-19 on entrepreneurs and business owners six months after the pandemic first caused restrictions on American life and business. Among established business owners, 58% have halted some of their main activities due to COVID-19. Of those who have closed a business, more than a third cited the pandemic as the reason.
“United States has long relied on entrepreneurs to drive innovation, job creation and economic growth. There is no doubt that the pandemic has created both challenges and opportunities for entrepreneurs and mature business owners, ”said the GEM US team co-leader and Babson College Entrepreneurship teacher Donna Kelley. “Stable jobs and economic vitality depend on the survival and growth of businesses. This research can help guide decisions that support entrepreneurship in America, which will surely be a critical contributor to post-pandemic recovery. “
Despite the fact that 82% of entrepreneurs thought starting a business was more difficult than a year earlier, and almost 70% cited delays in getting their businesses up and running due to COVID-19, Americans were still starting and running new businesses in 2020.
“People may have different reasons for starting a business: needing to generate income or seeing new opportunities, for example, but GEM results show that people still turn to entrepreneurship, even in the midst of a crisis. social and economic, “said Smaiyra Million., executive director of the Arthur M. Blank Center for Entrepreneurship at Babson College. “These are the adaptive and creative business leaders who solve today’s problems and help create new and lasting change for themselves, their businesses and their communities. This is especially critical when we look to the future. always have. Today’s entrepreneurs will evolve and learn from the last 18 months and come out stronger. “
“Much like the Great Depression or World War II, the pandemic promises to be a transformative event, an event in which the society we know is remade and filled with change and opportunity and entrepreneurial leaders will lead the way,” a declared Stephen Spinelli Jr., PhD, President of Babson College. “There is no roadmap for our post-pandemic recovery. The same attributes that empower business leaders to make decisions, solve problems and create value are what will move us forward with success. Entrepreneurial leadership is more necessary and relevant than ever. GEM will be there to witness and capture this extraordinary moment, and through research, we will continue to understand and learn from entrepreneurs and guide them in how they shape the world of tomorrow. “
Main additional findings
- About 40% of Americans knew at least one person who closed a business due to COVID-19, although 21% knew someone who started a business.
- Among the adult U.S. population (18-64 years old), 40% of those polled said their household income had declined due to COVID-19.
- More than a third of people who have closed a business cited COVID-19 as the reason (41% of women who closed a business and 30% of men who closed a business).
- Among established business owners, 28% had received or expected to receive financial support from the government related to the pandemic, with women reporting a higher percentage than men (32% vs. 25%).
- Established business owners were more likely than entrepreneurs (51% vs. 45%) to report that the federal government had responded effectively to the economic consequences of the COVID-19 pandemic.
- Among entrepreneurs, 51% said the state government was more effective than the federal government in responding, compared to 32% of established business owners.
- Necessity played a decisive role in the development of entrepreneurship in 2020; half of entrepreneurs were motivated to start a business for a living due to the scarcity of jobs, an increase of 22% from 2019.
- The ownership rate of established businesses (those who own or manage a business for more than 3.5 years) was 9.9%, down slightly from 10.6% in 2019.
- Among the adult U.S. population, 4.4% have closed a business, a 50% increase from 2.9% in 2019.
- Most Americans have a positive perception of entrepreneurship: it is associated with high status in society (78%), it is a good career choice (70%), and it receives positive media attention (72%). ).
- Perceptions about his ability to start a business were high (64%) and relatively unchanged from 2019. However, perceptions of opportunities have increased from 62% in 2019 to 49% in 2020. Fear of failure has increased from 35% in 2019 to 41% in 2020, a historic record.
- More than half (57%) of entrepreneurs start businesses in finance, services and information and communications technology.
- Growth projections, or the proportion of entrepreneurs planning to create more than five new jobs in the next five years, declined in 2020 (27.5% compared to 32.5% in 2019).
- Blacks are twice as likely as whites to have entrepreneurial intentions (20% vs. 10%) and almost twice as likely to start a business (26% vs. 14%).
- The TEA rate for women was 16.6% and for men 18.3%, or about eight female entrepreneurs for every 10 male entrepreneurs.
On Babson College
Babson College prepares and empowers business leaders who create, develop and manage sustainable economic and social value everywhere. We train the business leaders our world needs the most: those with strong functional knowledge, skills and vision to navigate change, manage ambiguity, overcome complexity, and motivate teams in challenging organizations. all types and sizes. A world leader in entrepreneurship training Recognized worldwide through American News and World Report, our undergraduate, graduate, executive, and partnership opportunities are tailored to the needs of our world.
Global Entrepreneurship Monitor (GEM) is a consortium of national teams, mainly associated with leading academic institutions, which conducts survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! The GEM Adult Population Survey (APS) provides an analysis of the characteristics, motivations and ambitions of individuals who start a business, as well as social attitudes towards entrepreneurship. The National Expert Survey (NES) examines the national context in which individuals start businesses.
In figures, GEM is:
- Over 20 years of data
- 150,000+ interviews per year
- Over 100 savings
- 500+ entrepreneurship research specialists
- More than 300 academic and research institutions
- 200+ funding institutions
GEM started in 1999 as a joint project between Babson College (United States) and London Business School (UK). The consortium has become the richest source of information on entrepreneurship, publishing a series of global, national and “special topics” reports each year.
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