Key Terms
World Wide Web
Family-owned business
Copreneurs
Small business
Gazelles
Summary
The following forces are driving the entrepreneurial trend in our economy:
- Entrepreneurs as heroes
- Entrepreneurial education
- Demographic and economic factors
- Shift to a service economy
- Technological advancements
- Independent lifestyles
- E-commerce and the World Wide Web
- International opportunities
Diversity is a hallmark of entrepreneurship; virtually anyone has the potential to become an entrepreneur.
- Young entrepreneurs. Members of Generation X are three times more likely than those in other age groups to launch businesses.
- Women entrepreneurs. Nearly 6 percent of adult women now own their own businesses. In fact, women are opening businesses at a rate about twice that of the national average.
- Minority enterprises. Hispanics, Asians, and African-Americans, respectively, are the minority groups most likely to become entrepreneurs.
- Immigrant entrepreneurs. Unlike the unskilled “huddled masses” of the past, today’s immigrants arrive with more education and experience.
- Part-time entrepreneurs. Many part-timers are “testing the entrepreneurial waters” to see whether their business ideas will work, whether there is sufficient demand for their products and services, and whether they enjoy being self-employed.
- Home-based businesses. The success rate for home-based businesses is high: 85 percent of such businesses are still in operation after three years.
- Family businesses. Of the 25 million businesses in the United States, 90 percent are family-owned and managed. These companies account for 60 percent of total U.S. employment, pay 65 percent of all wages, and generate 50 percent of the nation’s GDP.
- Copreneurs. “Copreneurs” are entrepreneurial couples who work together as co-owners of their businesses.
- Corporate castoffs. For more than a decade, one major corporation after another has announced layoffs, and many of these castoffs are choosing entrepreneurship as a career path.
- Corporate dropouts. The dramatic downsizing of corporate America has created another effect among the employees left after restructuring: a trust gap. The result of this trust gap is a growing number of dropouts from the corporate structure who then become entrepreneurs.
Of the 25 million businesses in the United States today, approximately 24.75 million, or 99 percent, can be considered “small.” Small companies employ 51 percent of the nation’s private sector work force, even though they possess less than one-fourth of total business assets. Almost 90 percent of small businesses employ fewer than 20 workers. Because they are primarily labor intensive, small businesses actually create more jobs than do big businesses. Small businesses also produce 51 percent of the country's private GDP and account for 47 percent of business sales. In fact, the U.S. small business sector is the world’s third largest economy, trailing only the entire U.S. economy and Japan! Small firms create four times more innovations per research and development (R&D) dollar than medium-sized firms and twenty-four times as many as large companies.
Section Outline
I. Behind the Boom: What’s Feeding the Entrepreneurial Fire
A. Entrepreneurs as Heroes
B. Entrepreneurial Education
C. Demographic and Economic Factors
D. Shift to a Service Economy
E. Technological Advancements
F. Independent Lifestyle
G. E-commerce and the World Wide Web
H. International Opportunities
II. The Cultural Diversity of Entrepreneurship
A. Young Entrepreneurs
B. Women Entrepreneurs
C. Minority Enterprises
D. Immigrant Entrepreneurs
E. Part-time Entrepreneurs
F. Home-based Businesses
G. Family Businesses
H. “Copreneurs”
I. Corporate Castoffs
J. Corporate Dropouts
III. The “Power” of Small Business
A. What Is a Small Business
B. Contributions of Small Businesses to the Economy
