Young Entrepreneurs Drive ‘Bright Future,’ GEM U.S. Report Shows
For 25 years, the Global Entrepreneurship Monitor (GEM) has analyzed the state of entrepreneurial activity in the United States and worldwide.
This year’s milestone GEM national report highlights a gem for the future of entrepreneurship.
For the second consecutive year, young entrepreneurs are starting businesses, and planning to start businesses, at higher rates than older generations, according to the Global Entrepreneurship Monitor 2023–2024 United States Report released by Babson College.
The latest GEM report, which polled 2,000 U.S. adults in the summer of 2023, highlights a continuation of last year’s surge in Total Entrepreneurial Activity (TEA) being driven by young entrepreneurs. TEA measures the percentage of adults actively engaged in starting or running a new business.
The youngest age group of entrepreneurs surveyed—18- to 24-year-olds—showed the highest rates of entrepreneurial activity and entrepreneurial intentions, according to the latest data in the new GEM U.S. report. Nearly one-fourth of those surveyed (24%) are currently entrepreneurs, and 21% are intending to start a business in the next three years. Previous GEM reports consistently found that the highest TEA was among the 25–34 or 35–44 age groups.
Young entrepreneurs (18–34 years) also were more likely to prioritize sustainability (61% vs. 47%) and take steps to minimize environmental impact (66% vs. 44%) and maximize social impact (55% vs. 36%) than older entrepreneurs (35–65 years).
“With an increase in young adult entrepreneurship, along with their focus on social and environmental impact, this year’s GEM findings indicate a bright future for entrepreneurship,” said Donna Kelley P’24, GEM U.S. team co-leader and the Frederic C. Hamilton Chair of Free Enterprise Studies and professor of entrepreneurship at Babson. “Young people, with their energy and creative ideas, can be a major force in driving positive change that benefits people and the planet.”
Milestone Report
The GEM U.S. report this year is the 25th survey of entrepreneurship worldwide since the Global Entrepreneurship Monitor was founded in 1999 as a joint venture of Babson College and the London Business School.
The annual report tracks entrepreneurship rates and characteristics, as well as attitudes and self-perceptions about starting businesses, across all genders, race/ethnicities, and age groups. The research aims to educate and inform policymakers, practitioners, and other audiences who are helping to share the future of the business world.
“Young people, with their energy and creative ideas, can be a major force in driving positive change that benefits people and the planet.”
Donna Kelley P’21, GEM U.S. team co-leader and the Frederic C. Hamilton Chair of Free Enterprise at Babson
With surging rates of entrepreneurial activity among young entrepreneurs, the milestone report this year highlights the strengths of the next generation of entrepreneurs.
“These trends bode well for the future of entrepreneurship as a driver for positive change in society,” Babson President Stephen Spinelli Jr. MBA’92, PhD wrote in the report’s foreword. “I am inspired by the initiatives young entrepreneurs are taking to develop into the leaders of tomorrow. While I see the next generation’s commitment to making an impact each day on Babson’s campus, it is reassuring to see that same accelerated level of activity among entrepreneurs around the United States.”
Other GEM Highlights
In addition to the rising rates of young entrepreneurs, the latest GEM U.S. report found strong entrepreneurial activity among Black entrepreneurs.
Black entrepreneurs had the highest rate of TEA, at 24%, double that of their white (12%) and Hispanic (13%) counterparts. Black respondents also had the highest rates of confidence in their ability to start a business (63%) compared with 49% of Hispanic and 46% of white respondents.
Other highlights from the GEM U.S. report include:
- The biggest motivation for starting a business in 2023, just as in 2022, resulted from job scarcity (62.5%), showing a more than a one-third increase from 2021 to 2023.
- Job creation expectations increased by one-third in 2023 compared with the previous year, with 72% of entrepreneurs stating that they expect to create at least one job in the next five years. Established business owners also are creating more jobs, with two-thirds currently having at least one employee and 12% employing 20 or more.
- Women narrowed the gender gap in starting information and communication technologies (ICT) businesses, more than doubling their rate of participation in this sector from 2022, to 8% in 2023, while men showed little change over the same time period (9% in 2023).
Posted in Entrepreneurial Leadership, Insights
