After the recession, entrepreneurs are on the rebound, study says
On Wednesday, PBS NewsHour special correspondent April Brown explored issues that African-American entrepreneurs face.
Nearly a decade after the Great Recession, entrepreneurship in industrialized countries shows small but promising signs of recovery.
In the United States, the number of businesses created this year is still down 15 percent compared to 2007, according to a report from the Organization for Economic Cooperation and Development. But when researchers looked at the first six months of this year, they noticed 12 nations with new business growth, including 0.6 percent in the United States.
Economist Mariarosa Lunati has studied entrepreneurship within these nations for more than a decade for the organization, and she said that’s a “very positive sign.”
It took a long time to build up investor and consumer confidence after the economic crisis swept the globe, she said, which accounts for the slow rebirth of new businesses. Among the countries studied, Finland was the worst hit and is halfway to the 2007 rate, while France, the United Kingdom, the Netherlands, Norway and Sweden are better off today than they were before the recession.
To gauge the health of entrepreneurship, Lunati and a team of researchers analyzed 27 indicators, such as business openings, closure, size and owner diversity, across 37 industrialized nations.
Positive New Business Growth in Industrialized Nations
Among entrepreneurs in industrialized nations, one out of 10 are women, and men were more likely than women to say they could access the money and training to start a business, the report said. But once women overcome those barriers and start their businesses, they are just as confident about their work as their male counterparts.
“It confirms that it makes sense to support women entrepreneurship,” Lunati said.
To “level the playing field” and encourage more women to spearhead their own ventures, Congress approved funding for a network of women’s business centers through the Small Business Administration in 1988.
Today, there are nearly 100 centers scattered across the United States. Since the late 1980s, businesses owned by women have grown nearly sixfold nationwide — from 5 percent to 29 percent, said Kiesha Haughton, the managing director for the Maryland Women’s Business Center.
Each year, about 1,600 women come to her center to build networks, share tips and introduce each other to new opportunities, Haughton said.
But challenges still emerge, especially for women who want work in fields dominated by men, Haughton said. Less than a decade ago, she met a woman who owned a construction company near Baltimore and reported problems securing bids for contracts on new projects.
“What she found out was they were putting solicitations in the men’s bathroom, and she’d have to go into the men’s bathroom to find solicitations,” Haughton said.
When Jaimie Mertz decided three years ago to start her own business, the 27-year-old gluten-free baker from Bethesda, Maryland, said the hardest part of running a business was just “getting it started.”
She built a website and bakes banana-chocolate vegan muffins, kale-turmeric loaf and custom birthday and wedding cakes for up to 10 hours a day to sell online and at local farmers’ markets. She loves talking about oat flour and toys with paleo recipes. And that’s not counting her other full-time job working with accounting software clients.
“I’m suppose to be answering to my day job from 8-to-5 like a normal person,” she said. “I’m usually baking at the same time.”
Mertz turned to the local economic development centers and the Maryland Women’s Business Center for advice on securing finance, insurance (she needed 17 different kinds) and licenses as she developed her business.
But she said she hopes her efforts will soon pay off. With a $181,000 small business loan and $30,000 of her personal savings, she said she plans to open a brick-and-mortar bakery in November. She purchased a 60-quart standing mixer along with a pair of refrigerators and freezers and wants to hire staff.
Mertz said she knows the first year can be tough for any new restaurant and business, but she’s ready.
“You’re figuring out the whole thing as you go along,” she said.