After decades of declining entrepreneurship, record numbers of Americans are forming their own businesses and working for themselves. Thanks to the Great Resignation and a growing economy, 360 out of every 100,000 American adults became new entrepreneurs each month on average in 2021.
Recent immigrants, Black and Hispanic Americans and younger workers are leading new business startups in this country. More than a third of the US workforce is freelancing, and business startups have spread far beyond Silicon Valley and large coastal cities.
Rather than positioning entrepreneurship as a privileged endeavor open only to those with wealth and connections, it should become a viable career path for Americans of all ages, backgrounds and level aspirations through high-quality education and training programs that are accessible, inclusive and equitable. Entrepreneurship is critical for economic development, and more Americans must develop this skill set and mindset to help them survive during turbulent economic times.
Startups and new businesses fuel job growth, foster a more resilient economy and help lift up entire communities. Whether it’s personal and career liberation, the desire to increase earning potential or follow a passion, entrepreneurship can be a rewarding path to a more prosperous life. Entrepreneurship should not be limited by race, ethnicity or gender. To protect the recent successes in entrepreneurship from a potential setback, we need more and better ways to lift genius and opportunity in all communities.
Our country has historically done a poor job of providing access to entrepreneurship. We built barriers that reinforced the legacy of systemic racism, failed to help people get the skills they needed or denied funding to entrepreneurs of color. Venture capital in Black-owned businesses, for example, rose in 2021 but fell just as quickly this year.
To ensure that entrepreneurship is a real option for all Americans, we need a broad approach that covers many sectors of this country.
This effort must begin at home and in communities. Parents and adults should expose children early on to the notion that owning your own business is a regular job like any other. People model their behavior on what they see around them. If children see entrepreneurs in their lives, they are more likely to view business ownership as a normal and accessible option for their adults.
The country’s education systems must play a huge role. K-12 schools must teach students that not all successful paths require a four-year degree. Instead, they should encourage alternative career paths such as entrepreneurship and embed entrepreneurial training within career and technical education programs. Colleges and universities must continue to increase their entrepreneurship offerings to meet growing student needs, especially among Black and Latino students.
At all levels of education, there should be programs that offer key development skills in sales and marketing, finance and accounting, and leadership so that potential entrepreneurs learn how to manage people, plan and budget for the future, navigate the rough economy and grow their businesses . Furthermore, these programs should support those seeking to start businesses in trades, service industries or the fast-growing creative economy.
Nonprofits can establish or fund business incubators that can support innovators from underrepresented backgrounds as they translate their ideas into sustainable businesses. Venture capital and other financial vehicles should be more widely accessible so that promising new businesses can be started, grown and scaled. It is important to target these programs specifically to Black entrepreneurs, who launch their businesses with less startup capital than white entrepreneurs.
The US Small Business Administration, through its Office of Entrepreneurship Education, can play an important role in helping small businesses succeed and expanding opportunities for inclusion. Congress should act quickly to extend another SBA initiative, the Boots to Business program that provides entrepreneurial training to people transitioning out of the military and their spouses, and fund similar initiatives to target other underserved populations.
The US Department of Labor may consider developing new programs aimed at supporting entrepreneurs and reviving past efforts such as Project GATE. This program added a path to self-employment to the services offered through its One-Stop Career Centers, which previously supported those seeking entry-level opportunities that could lead to stable lifelong employment. Although Project GATE existed only briefly in the early 2000s, it reported a small but significant increase in business ownership.
Existing models coupled with new approaches that reach a wider swath of America can help entrepreneurship become a viable and sustainable career path for people from all walks of life and a powerful driver of economic development and wealth building for historically excluded communities and individuals. . If we can grow the nation’s entrepreneurial ecosystem in an equitable manner, we can develop the next generation of successful small business owners who can create more quality jobs and realize the power and promise of entrepreneurship.
Kristina Francis is executive director of JFFLabs.