In Praise of Today’s Entrepreneurs: Fewer new businesses are starting, but minorities and women are founding more

By Joe Ricketts. Mr. Ricketts is founder of TD Ameritrade. Excerpt:

"We’re treading water. The most recent figures from the U.S. Census Longitudinal Business Database show America losing nearly as many businesses as are launched. In 2016, the most recent year for which data are available, roughly 433,000 businesses were born, and 400,000 died. The share of new firms as a percentage of total firms today hovers around 8%, much lower than the average “business birthrate” of 11% between 1980 and 2010. That’s a big concern because new businesses are engines of innovation, job creation and economic growth.

Even as the entrepreneurship rate declines, more women and minorities are starting businesses, according to recent data from the Kauffman Foundation. In 2017, 270 of every 100,000 female adults, or 0.27%, created businesses. That’s up from 0.23% in 2016. When the data are broken down by race, we see that the entrepreneurship rate for African-Americans was 0.3% in 2017, up from 0.22% in 2016. The rate for Latinos also increased, from 0.48% in 2016 to 0.5% in 2017.

If everyone faces the same regulatory landscape, why are women, African-Americans and Latinos becoming new entrepreneurs at a faster clip than they used to? I think it comes down to mind-set. People of all backgrounds are starting to see how they can participate in our wonderful free-market system. They’re innovating, creating jobs and lifting themselves and others up."