Entrepreneurship, new LLCs declining in U.S.

Entrepreneurship, new LLCs declining in U.S.

Entrepreneurs forming an LLC are among a rare breed as a recent survey found that only 6.9 percent of Americans are seeking to start a new business, a drop from 10.6 percent in 2005.

The Global Entrepreneurship Monitor found that there was a slight increase in 2009 among “necessity-driven entrepreneurs” – people who were forced to start a business after being laid off. A similar report by the U.S. Small Business Administration’s Office of Advocacy found that America ranked No. 8 among more than 70 nations when it came to entrepreneurial activity.

The figures are driven down by technology, which the SBA report’s authors, Zoltan Acs and Laszlo Szerb, say has become a “weak spot.”

“[The low scores are] a surprise and a possible cause for concern,” wrote the authors. “It is not just that the rest of the world has caught up, the United States seems to have abandoned this sector.”

As the U.S. population ages, more people become “risk-averse,” which lowers the number of entrepreneurs. Citizens of developing countries are much more likely to personally know an entrepreneur.

The average age of an entrepreneur in the U.S. is 37 years. Most research suggests that older, experienced entrepreneurs are a key factor that determines success.