Startup activity is on the rise this year in the United States - every month over half a million new businesses are started, which represents the largest year-on-year increase in the last twenty years.
The companies involved serve a variety of different purposes. They are also highly diverse, with people from all around the world looking to entrepreneurship in America. In this article we will take a look at the scene's demographics and how immigration is affecting startups.
The nation’s immigrant community is projected to rise to 78 million by 2060 - which will constitute 18.8% of the country’s entire population. In fact, the Census Bureau predicts that the previous record of 14.8% will be surpassed as soon as 2025.
Immigration has impacted many aspects of American culture. It’s also become the platform for the country’s changing face of entrepreneurship, challenging the preconceived notion that successful business people in the USA must be well educated rich white males, in the vein of Donald Trump and Bill Gates.
Over the last two years each race has had more entrepreneurial activity. Latinos, who accounted for 10% of all new entrepreneurs in 1996, now make up 22.1%. They aren’t the only group who’ve experienced a considerable rise - Chinese entrepreneurs continue to be attracted to the ‘Anglosphere’ despite the growth levels seen in their own country. This is due to the stability and long-term business prospects the USA arguably holds.
Although the white face of American entrepreneurship is changing, men still dominate startup leadership. According to the 2015 Kauffman Index, there’s a lower penetration of female leaders now than compared to 1996. Currently, 63.2% of startups are led by men, a figure that’s risen from 56.3% in 1996. In fact, we’re actually at somewhat of a nadir for female founded companies at the moment, although it’s hoped that an inflection point is on the horizon soon.
Ultra-successful entrepreneurs, like Mark Zuckerberg and Evan Spiegel, are the face of the Millennials. Both were in their early-twenties by the time their respective companies had found success. Unfortunately, their success hasn’t inspired enough 20-34 year olds to follow suit. Surprisingly, the ‘baby boomers’, those aged between 55-64, are the group which has seen the sharpest increase in entrepreneurship - accounting for 25.85%.
The 2015 Kauffman Index demonstrates that America’s entrepreneurial landscape is becoming increasingly diverse. There’s no consensus about what a startup employee ‘should look like’ but the Caucasian dominance which was once present has now diminished.
This is exciting news for the American economy. It will hopefully give birth to many new startups, all of which have different perspectives on how business should be done. It could well be the platform the USA needs in order to compete with the variety of challenges it’s going to face in the increasingly complex global economic environment.
Whatever the case, the startup scene in America is as vibrant as it’s ever been, and that is in some part down to the diversity the scene’s encouraged.