After decades of declining entrepreneurship, record numbers of Americans have been forming their own businesses and going to work for themselves. Thanks to the Great Resignation and a surging 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 at the forefront of starting new business 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 position 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 degree aspirations through high-quality education and training programs that are accessible, inclusive and equitable. Entrepreneurship is critical for economic advancement, and more Americans must develop this skill set and mindset to help them survive during turbulent economic times.
Startups and new businesses power job growth, underpin a more resilient economy and help lift up entire communities. Whether it’s personal and career liberation, a 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 recent gains in entrepreneurship from a potential recession, we need more and better ways to lift up genius and opportunity among all communities.
Our nation has historically done a poor job of providing access to entrepreneurship. We have either erected barriers that reinforced the legacy of systemic racism, failed to help people acquire the skills they need or denied funding to entrepreneurs of color. Venture capital to Black-owned businesses, for instance, soared in 2021 but plummeted just as quickly this year.
To ensure that entrepreneurship is truly an option for all Americans, we need a broad strategy that spans multiple 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 can see entrepreneurs in their lives, they’re more likely to view business ownership as a normal and accessible option for their grown-up selves.
The nation’s education systems should play an enormous role. K-12 schools must teach students that not all successful paths require a four-year degree. Instead, they should encourage alternate career avenues such as entrepreneurship and embed entrepreneurial training within career and technical education programs. Colleges and universities must continue to increase their entrepreneurship offerings to accommodate growing student demand, especially among Black and Latino students.
At all levels of schooling, there must be programs that offer foundational skills development in sales and marketing, finance and accounting, and leadership so potential entrepreneurs learn how to manage people, plan and budget for the future, navigate rough economic patches and grow their businesses . Furthermore, these programs should support those seeking to start businesses in trades, service industries or the fast-growing creator 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 must be more widely accessible so promising new businesses can be started, grown and scaled. It’s critical to target these programs specifically to Black entrepreneurs, who launch their businesses with significantly less startup capital than white entrepreneurs.
The US Small Business Administration, through its Office of Entrepreneurship Education, can play a vital role in helping small businesses succeed and expanding opportunities for inclusion. Congress should move 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 could consider developing new programs aimed at supporting entrepreneurs and reviving past efforts like Project GATE. This program added a pathway to self-employment to services offered through its One-Stop Career Centers, which historically have supported those seeking entry-level opportunities that can lead to stable lifetime employment. Though Project GATE existed only briefly in the early 2000s, it reported small but significant increases in business ownership.
Existing models coupled with new approaches that reach a broader swath of America can help entrepreneurship become a viable and sustainable career path for people from all walks of life and a strong driver of economic advancement and wealth-building for communities and individuals who have been historically excluded . If we can grow the nation’s entrepreneurial ecosystem in an equitable way, we can develop the next generation of successful small business owners who can create more quality jobs and make good on the power and promise of entrepreneurship.
Kristina Francis is executive director of JFFLabs.