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Self-Employment On Rise, While Employer Firm Creation Falls

Apr 19, 2011

Posted by Kristin Oberlander - Entrepreneurialism remains at a high level again in 2010, according to a Kauffman Foundation study. However, more individuals chose to be self-employed rather than start larger employer firms.

The study found that 0.34 percent of American adults created a business per month in 2010 (565,000 new businesses), a rate that remained consistent with 2009 and represents the highest level of entrepreneurship over the past decade and a half. In contrast, however, the quarterly employer firm rate has dropped from 0.13 percent in 2007 to 0.10 percent in 2010.

It raises some interesting questions about why so many people are flocking to self-employment. Could it be related to corporate downsizing? There's probably a good chance of that (some entrepreneurs opening their businesses out of necessity between jobs?). Could it also point to some factors that indicate that we are not in an economic climate where growing a business or starting a larger business is an attractive or viable option? Most assuredly.

What do you think the results mean? Please leave your comments in the secton below.

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