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Slump in US entrepreneurial activity continues

US entrepreneurial activity continued to fall in 2002 although the fall was not as pronounced as it had been in the previous year, according to the Global Entrepreneurship Monitor (GEM).

The 2002 entrepreneurial activity level fell to 10.5 per cent of the adult population from 11.7 per cent in 2001 and 16.7 per cent in 2000. But the figures remained 50 per cent higher than those recorded in 1998 after a dramatic entrepreneurial surge during the high-tech boom. The number of Americans who were optimistic in 2002 about the climate for starting a new business held steady from the previous year at 37 per cent.

‘The good news here is that the 2001 slump in entrepreneurship bottomed and may have set the stage for a return to new growth this year,' said Kauffman Foundation president and CEO Carl Schramm. ‘It is vitally important to have a thriving entrepreneurial class today, but we also have to think ahead and work harder to groom new generations of entrepreneurs who will continue to innovate, create jobs and contribute to a more prosperous national economy.'

GEM report author Heidi Neck, assistant professor of entrepreneurship at Babson College added, ‘entrepreneurship in the United States continued to thrive at a very high level, even in the wake of world economic decline.'

‘Though entrepreneurship in the United States peaked in the year 2000 at 16.7 per cent, the levels reported in 2002 may simply reflect an ongoing post boom retrenchment, rather than a structural decline.'

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