‘necessity’ entrepreneurship Vs. ‘opportunity’ entrepreneurship

The New York Times Small Business section today had a very interesting story about entrepreneurship and how the economic downturn creates new entreprenuers. This is not new and in this blog we also addressed this in the past.

The story, by Mickey Meece, quotes from the Kaufman Foundation:

“Others among the unemployed are taking the entrepreneurial route. The most recent Index of Entrepreneurial Activity by the Kauffman Foundation showed a slight uptick of new businesses in 2008 — a full recessionary year — over 2007. An average of 320 Americans out of 100,000 formed a business each month, Kauffman said. What’s more, it found, the patterns “provide some early evidence that ‘necessity’ entrepreneurship is increasing and ‘opportunity’ entrepreneurship is decreasing.”

Meece also addresses the success rates of these new ventures, indeed not all succeed but the statistic is not different than in good economic times.

Another interesting statistic is that:

“Many companies with billion-dollar market capitalizations were started during a recession, the report said, including Starbucks, Intuit and PetSmart.
Research from Kauffman in June found that more than half of the companies on the Fortune 500 list in 2009 and nearly half of the companies on the Inc. magazine 2008 list were founded during a recession or bear market.”

There is more good information and new venture examples in this story and I would recommend reading it.

Finally… good luck to Lisa Marie Grillos, the storys main feature, for her new venture. What a great idea: little pocket bags for bicycles.