After decades of declining entrepreneurship, record numbers of Americans are starting their own businesses and going self-employed. Thanks to the Great Recession and a growing economy, an average of 360 out of every 100,000 American adults became new entrepreneurs each month in 2021.
Recent immigrants, black and Latino Americans, and younger workers are leading the way in starting new businesses in this country. More than a third of the American workforce works as a freelancer, and startups have spread far beyond Silicon Valley and big coastal cities.
Rather than positioning 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 to economic progress, and more Americans must develop this skill and mindset to help them survive turbulent economic times.
Startups and new businesses drive job growth, support a more resilient economy, and help lift up entire communities. Whether it’s personal and career liberation, a desire to increase earning potential, or following 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 the recent advances in entrepreneurship from a potential recession, we need more and better ways to raise ingenuity and opportunity among all communities.
Our nation has historically done a poor job of providing access to entrepreneurship. We’ve either erected barriers that have reinforced the legacy of systemic racism, failed to help people get the skills they need, or denied funding to entrepreneurs of color. Venture capital for black-owned businesses, for example, rose in 2021 but fell 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 introduce to children early on the idea that owning your own business is a regular job like any other. People model their behavior based on what they see around them. If children can see entrepreneurs in their lives, they are more likely to view business ownership as a normal and affordable option for themselves as adults.
A nation’s education systems should play a huge role. K-12 schools must teach students that not all successful pathways require a four-year degree. Instead, they should encourage alternative career paths such as entrepreneurship and incorporate entrepreneurship training into vocational and technical education programs. Colleges and universities must continue to increase their entrepreneurial offerings to meet growing student demand, especially among black and Latino students.
At all levels of education, there must be programs that offer the development of basic skills in sales and marketing, finance and accounting, and leadership so that potential entrepreneurs learn how to manage people, plan and budget for the future, navigate rough economic patches, and grow their businesses. Moreover, these programs should support those who want to start a business in craft, service industries or the fast-growing creator economy.
Nonprofit organizations can establish or fund business incubators that can support innovators from underrepresented backgrounds as they translate their ideas into viable businesses. Venture capital and other financial resources must be more widely available so that promising new businesses can be launched, developed and expanded. It is critical that these programs target black entrepreneurs in particular, who start 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 quickly expand another SBA initiative, the Boots to Business program that provides entrepreneurial training for military transitioners 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 previous efforts such as the GATE project. This program has added a path to self-employment to services offered through its one-stop career centers, which have historically supported those seeking entry-level opportunities that can lead to stable, lifelong employment. Although the GATE project only existed briefly in the early 2000s, it reported a small but significant increase in business ownership.
Existing models combined with new approaches that reach a wider swath of America can help make entrepreneurship a viable and sustainable career path for people from all walks of life and a powerful driver of economic progress and wealth building for historically excluded communities and individuals. . If we can develop the nation’s entrepreneurial ecosystem in an equitable way, we can develop the next generation of successful small business owners who can create better jobs and harness the power and promise of entrepreneurship.
Christina Francis is the CEO of JFFLabs.