Contact: Paul D. Reynolds, Principal Investigator Babson College Office:
(617) 239-5608; Home: 617-431-1932
Over one-third of U.S. Households Involved in New and Small Businesses: Entrepreneurial Research Consortium Announces Results of First Pilot Study
One of every three U.S. households--37 percent, or 35 million households--includes someone who has had a primary role in a new or small business, according to a first-of-its-kind study by an international research collaborative. The Entrepreneurial Research Consortium (ERC), comprised of 27 college and university, foundation, and government units, combined research skills and funds to implement this project in the U.S.
The study determined that for seven percent--more than 6 million--U.S. households, one or more persons is involved in a new start-up. In 23 percent--approximately 22 million households--one or more persons is currently involved in a business start-up; owns an existing business; or has recently made an informal investment in someone else's business.
"This is the first thorough assessment of business startups in a market economy; it clearly demonstrates that new and small businesses are a far more integral part of American life than anyone anticipated," said Paul D. Reynolds, Principal Investigator and ERC Coordinator. Reynolds is the Paul T. Babson Professor in Entrepreneurial Studies at Babson College, Wellesley, Mass, host institution for the ERC.
Several preliminary studies indicate that as many as four percent of U.S. adults--more than 7 million--are involved in more than 3 million start-up efforts at any given time, according to Reynolds. The ERC is developing a national panel study to provide a more complete understanding of the development of new and small firms. Almost 100 scholars and researchers are participating in the research design and data analysis of the pilot study just concluded.
The sample was developed and all data collected by the University of Wisconsin Survey Research Laboratory in Madison, Wisconsin. Interviews were conducted August-October 1996 with a representative national sample of 754 households in the continental U.S. (48 states and the District of Columbia). The six roles considered were: current business owner, nascent entrepreneur, nascent intrapreneur (starting a business venture for one's employer), discouraged entrepreneur, discontinued business owner, and business angel.
As the next step, the ERC is developing an extensive research agenda to explore the many facets of the entrepreneurial process, which, in previous research, has received little systematic attention with representative samples. The U.S. panel study of business start-ups will be used to explore factors that affect the presence of start-ups, successful firm births, and the early life course of new firms. Dozens of teams of experienced scholars will study: individual and personal factors; the economic and social context; the influences of family, gender, and ethnic background; and the actual procedures and strategies involved in assembling resources to start a new firm.
The ERC claims that results of the study will improve the effectiveness of educational and clinical programs, enhance the impact of government policies and programs, and contribute to creating a more efficient entrepreneurial engine. A key element, it believes, for the economic growth and adaptation of modern market economies.
Member units of the ERC include:
Babson College; Bodo Graduate School of Business (Norway); Boston University; Canadian Council for Small Business and Entrepreneurship; Clemson University; Coleman Foundation; Cornell University; Entrepreneurship Theory and Practice; Indiana University; KERA, Ltd: Enterprise Development and Financing (Finland); Marquette University; National Education Center for Women in Business; National Federation of Independent Business; New Jersey Institute of Technology; Swedish National Board for Industrial and Technical Development; Rensselaear Polytechnic Institute; Small Business Foundation of America; Syracuse University; Swinburn University of Technology (Australia); University of British Columbia (Canada); University of Cincinnati/Xavier University; University of Colorado-Boulder; University of Houston; University of Michigan; University of Pennsylvania/Widener University; University of Southern California; U.S. Small Business Administration, Office of Advocacy.
RSS