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Print Edition StoriesFriday, December 12, 2008
Massachusetts entrepreneurs confident in face of recession
By Brendan Lynch
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Massachusetts’ entrepreneurial streak continues, and owners of those growing businesses are expressing optimism in the face of the current recession, according to a study conducted by Babson College.
The study, the 2008 Babson Entrepreneurship Monitor for the Commonwealth of Massachusetts, says the Bay State is the best in the nation for entrepreneurial activity. The commonwealth has a higher rate of both early-stage and established businesses than the U.S. average, with a rate of 23 percent compared to 14.1 percent average across the country, according to the study. New businesses are being created more rapidly in Massachusetts than in the U.S. overall, established businesses are growing, and entrepreneurs report feeling “opportunity-driven” and optimistic of their success.
The study examined state entrepreneurial activity by stage of business development, region, and `entrepreneur’s background and measured it against the rest of the nation. The study was conducted over the summer in cooperation with the state’s Executive Office of Labor and Workforce Development and the Executive Office of Housing and Economic Development.
Among the study’s findings:
• The rate of early and late stage entrepreneurial activity in Massachusetts is much higher than in the rest of the U.S. — 23 percent compared to 14.1 percent.
• Early stage entrepreneurs are more likely to be male, non-white, of immigrant status and from a lower level of household income than established business owners.
• Massachusetts entrepreneurs average 50 years of age. Compared to the national average, early-stage entrepreneurs in Massachusetts tend to be older, have a lower fear of business failure and are more optimistic.
• Early-stage entrepreneurs are at the high and low ends of the educational spectrum, being either high school educated or having more than a college degree. The majority of established entrepreneurs are high school educated.
• New businesses tend to be started by individuals who are already working full-time.
• Most businesses are started by a single founder.
• More than 90 percent use technology (computers, Internet, etc.) in their businesses.
• Half of the businesses reported equal focus on profit and social goals.
• Early-stage businesses tend to be relatively innovative in terms of the products and services they bring to market and the technologies they use within the business.
• Major challenges for start-ups are establishing necessary infrastructure, licensing, permits and the cost of utilities.
• Few businesses have more than 10 percent of international customers.
• Significant opportunities for technology transfer continue to exist.
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