Calling entrepreneurship "one of the important drivers of economic growth" and business start-ups "one of the most dynamic parts of the U.S. economy," the Census Bureau released Thursday the results of its first survey of the sector, an assessment that will be repeated annually.
"For the first time, we are making statistics available every year that show a portrait of America's business owners, providing information vital to understanding the state of our economy," Census Bureau director John H. Thompson said in a prepared statement.
Knowing the race and ethnicity of entrepreneurs, their motivations for starting their businesses, the number of jobs they create, and their financial challenges, among other things, are matters of significant importance, wrote the Census Bureau's Lucia Foster and Patrice Norman, authors of a paper accompanying the inaugural survey results, which are based on data from 2014.
"Not only do these start-ups impact job creation, but they also play a large role in innovation and productivity dynamics in the U.S.," they wrote.
The 2014 Annual Survey of Entrepreneurs is a public-private partnership by the Census Bureau, the Ewing Marion Kauffman Foundation, and the Minority Business Development Agency. Based on responses from 290,000 businesses with paid employees, these were among the findings:
- Nearly one in 10 employer businesses were in operation less than two years.
- Entrepreneurs reported employing 115.1 million people and generating revenues of $33 trillion, with annual payroll of $5.6 trillion, or $48,997 per employee.
- Minority-owned businesses comprised 17.5 percent of the total. Asian-owned businesses made up 53.4 percent of those; African American-owned, 11.4 percent; and Hispanic-owned, 31.5 percent.
- Women owned 1.1 million businesses, or 19.4 percent, with revenues of $1.3 trillion, or 4 percent of the total.
- Sectors with the highest number of businesses were professional, scientific and technical services (771,341); retail trade (643,236); construction (638,839); and health care and social assistance (635,107).
- Most businesses (78.5 percent) had fewer than 10 employees.
As bragging rights go, Philadelphia can't claim many. Of the top 10 major metropolitan areas, it ranked ninth in minority-owned businesses, with 15.7 percent. No. 1 was Miami at 39 percent. Philadelphia was also ninth in female-owned businesses, with 18.5 percent. Atlanta had the biggest share, 24.5 percent.
Philadelphia lagged in new businesses, considered less than two years old, with 7.8 percent. Miami had the biggest share, 11.1 percent.
"These statistics give us a yearly snapshot that has been missing as we allocate national resources to support small-business growth and development," said Patricia Blakely, executive director of the Philadelphia-based Merchants Fund, which provides grants to small businesses. "I am saddened to not see Philadelphia on the list of high-growth cities, but that is a challenge we should accept to invest in our local economy and to figure out what the barriers are to business formation."
Also worth noting, Blakely said, is the ownership diversity revealed by the survey, "which reflects the important role that new Americans and minorities have in creating jobs and wealth."
That the survey will be done annually is a source of particular enthusiasm to Marc Kramer, executive director of the Private Investors Forum in Philadelphia, which runs the Angel Venture Fair, and new executive-in-residence for family business and entrepreneurship at St. Joseph's University. The new survey of entrepreneurs will supplement the Census Bureau's Survey of Business Owners, conducted every five years, a time frame in which many start-ups fail.
"Five years in our world is ridiculous," Kramer said.
The survey data, he said, "allow for planning, from companies to universities, to say to themselves, 'What kind of courses should we be offering to students, and how can we help the communities we're involved in be more successful?"
At the Small Business Administration, Mid-Atlantic regional director Natalia Olson-Urtecho, a serial entrepreneur, called the new census survey "very exciting. It helps us look at what we're doing right and see how we can do better."