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2021 National Report on Early-Stage Entrepreneurship in the United States

The rebound from the widespread economic damage of the COVID-19 pandemic showed up through a partial return to pre-pandemic levels in both new entrepreneurial activity and the opportunity share of new entrepreneurs.

Published: March 2022

Author: Robert Fairlie, professor, University of California, Santa Cruz; consultant, Ewing Marion Kauffman Foundation

Suggested citation: Fairlie, Robert (2022) State Report on Early-Stage Entrepreneurship in the United States: 2021, Kauffman Indicators of Entrepreneurship, Ewing Marion Kauffman Foundation: Kansas City.

This is a report published by the Ewing Marion Kauffman Foundation utilizing content and data from multiple sources and external contributors. Every effort has been made to verify the accuracy of the information contained in this report and is believed to be correct as of the publication date. Nonetheless, this material is for informational purposes, and you are responsible for validating the applicability and accuracy of the information in any use you make of it.

The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship.

This report presents four indicators tracking early-stage entrepreneurship for the years 1996–2021: rate of new entrepreneurs reflects the number of new entrepreneurs in a given month, opportunity share of new entrepreneurs is the percentage of new entrepreneurs who created their businesses out of opportunity instead of necessity, startup early job creation is the total number of jobs created by startups per capita, and startup early survival rate is the one-year average survival rate for new firms. We report national trends for the four indicators as well as some demographic trends for the rate of new entrepreneurs and opportunity share of new entrepreneurs.

  • Nationally, the rate of new entrepreneurs in 2021 was 0.36 percent, meaning that an average of 360 out of every 100,000 adults became new entrepreneurs in a given month.
  • The opportunity share of new entrepreneurs rebounded substantially to 80.9 percent from its low of 69.8 percent in 2020, but remained much lower than its pre-pandemic level of 86.9 percent in 2019. The decline from 2019 to 2020 during the first year of the pandemic was 17.1 percentage points, which is much larger than the one-year decline of 6.9 percentage points from 2008 to 2009 during the Great Recession.
  • Startup early job creation in 2021 was 4.7 jobs per capita, defined here as startups hired 4.7 jobs for every 1,000 people. Startup job creation was down from pre-pandemic levels.
  • The startup early survival rate was 81.7 percent in 2021, reflecting an increase from 2020 as the economy improved,
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