Early-Stage Entrepreneurship in the United States: National and State Report (2019)

The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship.

This report presents four indicators that track early-stage entrepreneurship for the years 1996-2019: rate of new entrepreneurs reflects the number of new entrepreneurs in a given month, opportunity share of new entrepreneurs is the percentage of new entrepreneurs who created their businesses out of opportunity instead of necessity, startup early job creation is the total number of jobs created by startups per capita, and startup early survival rate is the one-year average survival rate for new firms. National and state level trends are reported for all four indicators. In addition, demographic trends are reported for the rate of new entrepreneurs and opportunity share of new entrepreneurs.

Report Highlights:

Nationally, the rate of new entrepreneurs in 2019 was 0.31%, meaning that an average of 310 out of every 100,000 adults became new entrepreneurs in a given month. The rate of new entrepreneurs in 2019 ranged from a low of 0.17% in Rhode Island to a high of 0.47% in Florida. The median for states in 2019 was 0.30%, reflecting 300 out of every 100,000 adults.
The opportunity share of new entrepreneurs nationally in 2019 was 86.9%. The opportunity share of new entrepreneurs ranged from a low of 71.4% in Washington, D.C., to 96.2% in South Dakota, with a median of 85.6%.
National startup early job creation in 2019 was 5.2 jobs, meaning that the average startup that hired would hire a little over 5 jobs for every 1,000 people. Startup early job creation in Washington, D.C., was 9.4 jobs per 1,000 people, compared to 3.2 jobs per 1,000 in South Dakota, and a median of 4.7.
Startup early survival rate was 79.6% in 2019, meaning that almost eight in 10 startups survived the first year. Startup early survival rate ranged from 69.4% in Connecticut to 90.5% in Virginia, with a median of 79.4%.
The overall KESE Index – an equally-weighted composite of the four indicators – was 1.2 nationally. The index is normalized at zero. The overall KESE Index ranged from -7.6 in Connecticut to 5.0 in California, with a median of 0.5.