New York State Lags Behind Rest of Country in Entrepreneurship & Small Business Growth, According to New Study from Baruch College

NEW YORK--(EON: Enhanced Online News)--Baruch College announced today the results of the Global Entrepreneurship Monitor (GEM) 2009: New York State Report, which show that rates of entrepreneurship throughout New York State are substantially below national averages. Further comparison shows that those small businesses that are established in New York tend to be smaller, create fewer jobs and are more often launched by entrepreneurs out of necessity, rather than opportunity. The GEM study was carried out by Babson College and Baruch College and supported by grants from the office of Congresswoman Carolyn Maloney and the Global Entrepreneurship Research Association (GERA).

“We need to better nurture our entrepreneurs and encourage their vision; their success is our best hope for future job growth.”

GEM findings include:

• New York State has lower rates of early stage (6.7%) and established business ownership (5.7%) as compared to the U.S. (8.7% and 7.7%).
• New York State nearly triples nationwide rates among people who became entrepreneurs because they felt they had no other choice—“necessity” entrepreneurs.
• Among people with some post-secondary education, the rate of early stage, necessity-driven entrepreneurship in New York State is nearly five times that of the U.S. For people with bachelors and post-graduate degrees, New York State early stage entrepreneurs are three times more likely to be necessity-driven.
• New York State non-Caucasian entrepreneurs have shut down their businesses in the last 12 months at nearly double the rate of their U.S. counterparts.
• New York State entrepreneurs are less likely than their U.S. counterparts to have access to Internet connections; however, New York State has a higher rate of Internet businesses than the U.S.
• New York State surpasses the rest of the country only in its rate of business failures, a statistic which remains consistent by region, gender, age and ethnicity.

“This report tells us that New York State is failing its entrepreneurs and small business owners by not creating an environment that supports their ambitions,” said Edward G. Rogoff, Ph.D., Professor and Chairman, Department of Management, Baruch College, Zicklin School of Business. “We need to better nurture our entrepreneurs and encourage their vision; their success is our best hope for future job growth.”

The GEM study offers several recommendations to improve New York State’s dismal record on entrepreneurship and small business success, including:

• Conduct a needs assessment of entrepreneurs and prospective entrepreneurs across the state.
• Create a state-wide technical and financial service providers’ network to assist entrepreneurs.
• Support the creation of networks to facilitate interaction among entrepreneurs, provide them with opportunities for developing peer-to-peer support, role-modeling, mentoring and strategic partnerships. These networks should also help entrepreneurs to pool resources throughout the state.
• Study the reasons behind poor broadband coverage in some areas of the state and develop a plan to remedy this situation.
• Reduce the tax and regulatory burden for entrepreneurs.
• Nurture New York State’s minority and immigrant entrepreneurs who are more likely to be necessity-driven entrepreneurs than any other groups.
• Target high-growth industries that already exist in the state for effective training, networking, mentoring and financing programs.

GEM Methodology: The New York State data was gathered in March 2009 using a random digit dial telephone survey of New York State residents. Respondents were asked questions relating to planned business start-ups in the next three months, existing business start-ups (businesses less than 42 months old) and established businesses (businesses more than 42 months old). They were also asked about demographic information, motivations, innovation, technology usage, entrepreneurial attitudes and perceptions, aspirations and business financing. The GEM 2008 United States Adult Population Survey results were conducted in June of that year and were used in this report for comparison purposes.

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