According to Hiscox’s annual ‘DNA of an Entrepreneur’ report, which surveys small businesses in the UK, US, France, Germany, the Netherlands and Spain, American businesses are leading the way with regards to growth in revenue, profits and customers. The success of entrepreneurship in the US is so important that the country is being rated the most entrepreneurial country in the world.
Key factors for the success of entrepreneurship in the USA
Mike Maddock, writing for Forbes, hypothesises that the reason for the success of entrepreneurship in the USA is a confluence of three main factors. Firstly money; namely the ease with which you can start a new business and have access to funding. Secondly, empathy, which is necessary for innovation and searching for an ‘unmet need’. Finally, and possibly most important of all, is culture: the American mindset tolerates risk and failure; it prefers self-employment and celebrates self-made wealth; and there is a culture of innovation and admiration for courage and creativity. In 2015, over a quarter (28.5%) of all new entrepreneurs in the USA were immigrants to the country, perhaps drawn to the aspirational values of its society and chasing the famous ‘American dream’ in which anyone can succeed through hard work and sheer determination. This enthusiastic individualism is prevalent in American society and is reflected in the fewer restrictive pieces of legislation for new businesses compared with European countries, where the early years of a new business can be riskier. In a study published by Bruegel, Europe produced just 12 new big companies between 1950 and 2007 whereas America produced 52 during the same period, suggesting the USA is more accommodating to growing and sustaining large businesses.
Despite the stereotype of the whizz-kid entrepreneurs who drop out of college and start businesses in their teens, the vast majority of successful American entrepreneurs are older and well-educated, shown in Kauffman’s 2009 survey ‘The Anatomy of an Entrepreneur, Family Background and Motivation‘ where 95.1% of those surveyed had earned bachelor’s degrees, with 47% having more advanced degrees.
American women are becoming more entrepreneurial than men
Interestingly, for the first time the American entrepreneur of 2015 is more likely to be female than male, with American women outnumbering men 53% to 47%, which is in sharp contrast to the global statistics, where women make up just 38% of new entrepreneurs. Women now own 38% of all businesses in the US, accounting for an estimated 11.3 million firms according to the 2016 State of Women-Owned Businesses Report. A great example of American entrepreneurship is CEO of Buzz Marketing Group, Tina Wells. While still in high school she founded her first successful business, and now serves on the Young Entrepreneur Council, the United Nation’s Global Entrepreneurship Council, and The Franklin Institute’s board of directors.
With a culture that prioritizes entrepreneurship, the USA leads the world with its entrepreneurial spirit and this looks set to continue as a 2015 report from the Global Entrepreneurship Monitor (GEM), states that a record high of 27 million Americans (nearly 14%) are starting or running new businesses. And with 69% of small business owners being optimistic about the year ahead, the future is looking bright for the American entrepreneur.