In this brief, we report on trends in race and ethnicity, age, and immigration among new entrepreneurs in the United States between 1996 and 2019. The rate of new entrepreneurs captures the percentage of the adult, non-business owner population that starts a business each
month. This is a yearly average, and it measures entrepreneurial activity broadly defined, capturing employers and non-employers and incorporated and unincorporated businesses. The rate of new entrepreneurs includes business owners regardless of business size, origin, growth potential, or intentions.
Highlights: The share of all new entrepreneurs who are Latino more than doubled between 1996 and 2019 while the share who are White decreased over the same time period.New entrepreneurs were largely young in 1996, and were more likely to represent all ages by 2019. In 2019, about 1 in 4 new entrepreneurs was an immigrant. This is close to twice the share of entrepreneurs that were immigrants in 1996.
Who is the Entrepreneur? Race and Ethnicity, Age, and Immigration Trends among New Entrepreneurs in the United States, 1996–2019 | 2020, No. 9
The share of new entrepreneurs refers to the percentage of new entrepreneurs who belong to a specific race and ethnicity. Race and ethnicity groups reported here are Asian, Black, Latino, and White.
The share of new entrepreneurs by race and ethnicity is reported in Table 1. Between 1996 and 2019, the Latino share increased from 10.0% to 22.8%, the Black share increased from 8.4% to 10.1%, the White share decreased from 77.1% to 58.0%, and the Asian share increased from 3.4% to 7.0%.
The share of all new entrepreneurs who are Latino nearly doubled over the time period. In 2009 and 2010, the White and Black shares of new entrepreneurs fell by 4.5 percentage points and 1 percentage point, respectively. In these years, the Latino and Asian shares increased by 4.7 and 1.2 percentage points.
The share of new entrepreneurs by age group is reported in Table 2. Between 1996 and 2019, the share of new entrepreneurs aged 20–34 decreased from 34.3% to 27.2%. Over the same time period, the share of new entrepreneurs aged 35–44 decreased from 27.4% to 22.9% and the share of new entrepreneurs aged 45–54 increased slightly from 23.5% to 24.8%. Those aged 55–64 represented about 1 in 4 new entrepreneurs in 2019 (25.1%), compared to 14.8% in 1996.
The composition of new entrepreneurs in the United States has been aging. By 2019, about half of new entrepreneurs were aged 20–44 and half were aged 45–64. Those aged 20–44 accounted for 61.7% of new entrepreneurs in 1996, compared to 50.1% in 2019, while those aged 45–64 accounted for 38.3% in 1996 and 49.9% in 2019. By 2019, new entrepreneurs were generally likely to be coming from all age groups, whereas in 1996, more than one third were between 20–34.
The share of new entrepreneurs refers to the percentage of new entrepreneurs who are either immigrants or native-born
The share of new entrepreneurs by nativity is reported in Table 3. Immigrants account for 25.4% of all new entrepreneurs in 2019, which represents nearly twice the share of new entrepreneurs in 1996 (13.3%). Over this time period, the share of new entrepreneurs who were native-born decreased from 86.7% to 74.6%.
Data for the rate of new entrepreneurs is one of the four indicators in the Kauffman Indicators of Early-Stage Entrepreneurship Series. Since 1996, it has been compiled by Robert Fairlie using a monthly panel dataset of the Current Population Survey (CPS). See indicators.kauffman.org.