Starting a Business

Study: Fewer Startups Launched in 2012

Study: Fewer Startups Launched in 2012
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2 min read
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The rate of business launches in the United States dropped slightly in 2012 compared with the previous year, according to a report released today by the Ewing Marion Kauffman Foundation, a Kansas City, Mo.-based organization that seeks to advance education and entrepreneurship. But the change may be a sign of the recovering economy rather than declining interest in entrepreneurship.

The report found that the average monthly rate of adults starting businesses fell to 0.30 percent in 2012 from 0.32 percent in 2011. There were 514,000 new business owners per month in 2012 compared with 543,000 the previous year -- or about 29,000 fewer startups launching each month.

Interestingly, the report attributes the overall drop in business creation to a decline in male entrepreneurs. The rate of men launching businesses decreased to 0.38 percent in 2012 from 0.42 percent the year before. Entrepreneurial activity for women remained stable at 0.23 percent.

"The fact that the rate for men starting businesses dropped so significantly in 2012, when unemployment also went down, suggests that men were getting jobs [and] didn't feel the pressure to start businesses as a last resort," said Robert Fairlie, the study's author and director of graduate programs in Economics at the University of California, Santa Cruz, in a statement.

The research also showed fewer young adults starting businesses. Startups created by those ages 20 to 34 fell to 0.23 percent in 2012 from 0.27 percent the year before. Meanwhile, those ages 35 to 44 and 55 to 64 started slightly more businesses last year than in 2011.

Related: Thinking About Hiring? Signs of Life in the Job Market

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