One-half of Americans who started new businesses in 2020 became entrepreneurs because they had problems finding work during the Covid-19 pandemic, according to new data published by Babson College.
During 2020, the total early-stage entrepreneurial activity rate that measures the percentage of adults 18 to 64 actively engaged in starting or running a new business was 15.4%, down slightly from 17.4% in 2019 but equal to the 2018 level.
The 50% that turned to entrepreneurship based on the dismal early Covid-era job environment represented a 22% increase from 2019, while 54% of entrepreneurs, and 43% of business owners reported that the pandemic introduced them to new business opportunities.
“These are the adaptive and creative entrepreneurial leaders that solve today’s problems and help create new and lasting change for themselves, their businesses, and their communities,” said Smaiyra Million, executive director of The Arthur M. Blank Center for Entrepreneurship at Babson College in Wellesley, Massachusetts. “This is especially critical as we look to the future. There is no going back to doing what we have always done. Entrepreneurs today will evolve and learn from the lessons of the last 18 months and emerge stronger.”
However, 58% of established business owners said they halted some of their core business activities because of Covid. For those who closed a business in 2020, more than one-third cited the pandemic as the reason for shuttering their operations.
The report’s data was culled from a survey of 2,000 adults during August 2020 and first appeared in Babson College’s 2020/2021 U.S. Global Entrepreneurship Monitor Report.
