Study: Florida is highly entrepreneurial, but there's work to do
We're about 30 percent more entrepreneurial than the nation as a whole. Our state's entrepreneurship community skews more male and a little older. We're less afraid of risk, and we're more likely to take our business global.
That's what Florida looks like, according to findings in the 2012 Global Entrepreneurship Monitor U.S. Report, issued recently by Babson College and Baruch College.
Donna J. Kelley, associate professor of entrepreneurship at Babson and one of the report's lead authors, said both positives and negatives can be drawn from the findings. A big positive: Florida is more globally focused than the nation as a whole. Nearly 19 percent of Florida entrepreneurs in 2012 reported that more than one-fourth of their customers come from outside the country, while the national average is 12.4 percent.
While the rate of early-stage entrepreneurial activity is high -- Florida's total entrepreneurial activity rate (17 percent) exceeds the national rate (nearly 13 percent) -- more of Florida's entrepreneurs say they are in it out of necessity, rather than solely for the opportunity, Kelley said. Florida's rate of necessity entrepreneurship is 26 percent, compared to the national rate of 21 percent and much lower rates in some parts of the country. Higher rates of necessity entrepreneurship can typically result in more very small companies with less growth potential, she said.
Here are a few more findings:
Florida men are more than twice as likely to engage in entrepreneurial activity as women, compared to a 10-7 ratio shown nationally. Also, among both genders, much more of Florida's entrepreneurial activity falls in the 35-54 age group than the 18-34 or 55 and over.
The state is distinguished by its positive assessment of capabilities (64 percent) compared to the national average (56 percent)
Florida entrepreneurs have a lower than average fear of failure (26 percent) compared to the national average (32 percent).
"Given low median household income levels and stagnating GDP, entrepreneurship can contribute to the Florida economy in many ways. Previous efforts regarding taxes and promoting entrepreneurship may go a long way to make use of the growing population, but more specific programs aimed at youth and women, as well as growth businesses, might benefit the state," the report said.
Nationally, the report found, the U.S. entrepreneurial activity rate of nearly 13 percent in 2012 was an all-time high since GEM first began tracking entrepreneurship rates in 1999. And it was up substantially from 7 percent in 2009. The entrepreneurial activity rate measures those who have recently started businesses or are on the verge of doing so.
"Despite a sluggish economy, 2012 was marked by U.S. entrepreneurs reporting greater optimism and confidence in their abilities to start new businesses," said Kelley. "Nearly 13 percent of the U.S. adult population was engaged in entrepreneurship with the vast majority starting businesses to pursue an opportunity rather than out of necessity. On the downside, Americans closing businesses were twice as likely as those in other innovation-driven economies to cite difficulties financing their ventures."