NC Entrepreneurship On the Move

One of the best sources of information on entrepreneurship is the Ewing Marion Kauffman Foundation. The Kauffman Index of Entrepreneurial Activity looks at demographic trends in start-up activity over a 15 year time period.

Key findings last year:

Age Groups:

Growth was highest among 45- to 54-year-olds, rising from 0.35 percent in 2010 to 0.37 percent in 2011. The youngest group (aged 20 to 34) also showed a slight increase. In contrast, the 35- to 44-year-old and 55- to 64-year-old groups experienced declines in entrepreneurial activity rates from 2010 to 2011. Contrastingly, the share of new 55- to 64-year-old entrepreneurs has risen from 14.3 percent in 1996 to 20.9 percent in 2011 due to an aging U.S. population.

Ethnic Groups:

The Latino share of all new entrepreneurs rose from a little more than 10 percent in 1996 to 22.9 percent in 2011, reflecting longer-term trends of rising entrepreneurship rates and a growing share of the U.S. population. The Asian share of new entrepreneurs also rose substantially from 1996 to 2011, but remains relatively small at 5.3 percent. The white share of new entrepreneurs declined during this time period, while the African American share increased slightly. Both immigrant and native-born entrepreneurial activity declined slightly in 2011; however, immigrants remained more than twice as likely to start new businesses as were the native-born.

Industry Groups:

By industry, construction had the highest entrepreneurial activity rate at 1.68 percent, continuing an upward trend over the past several years, followed by the services industry at 0.42 percent. The manufacturing startup rate was the lowest among all industries, with only 0.11 percent of non-business owners starting businesses per month during 2011.

In North Carolina, while we don’t have pinpoint data to break down the Kauffman numbers on a local basis, we can extrapolate their impact on our entrepreneurial scene. We should anticipate more 45-54 year olds to start businesses, a greater demand among non-Caucasians, and a rebound of construction start-ups to complement the steady flow of services businesses.

The Huffington Post reported last week that North Carolina is one of the top 10 states for startup hiring in 2011, based on the growth in the total number of jobs at start-ups. While there is definitely start-up activity in all regions of the state, outside of North Carolina the start-up scene around the Research Triangle Park area is best known. It seems all of the Triangle research universities are wanting to champion entrepreneurship and its healthy impact on the state and local economy. Duke University recently completed another Startup Challenge. NC State University hosted the Lulu Games competition as a part of its Entrepreneurship Initiative.

Over at UNC, in a massive research project conducted at the Kenan Institute of Private Enterprise, Ted Zoller highlighted the role of the dealmaker in assisting entrepreneurial ventures to reach their funding milestones. While the person who matches the entrepreneur with the funding source is critical for many life science and high technology ventures, not all start-ups are so capital intensive. What is a common need among businesses of all types is mentoring. Whether one is using something similar to the programs developed at MIT or a localized version, mentoring–coupled with community and education–is critical to successful business launches.

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