In the United States, more people became millionaires during the Great Depression than at any other time in the history of that country. Times were hard but for enterprising entrepreneurs who sought out opportunities and were prepared to take risks and work hard, the rewards were great. Will history repeat itself in the Great Recession? After all, entrepreneurship is a rising global trend…
What is Entrepreneurship?
An entrepreneur is a person who sets up a business, taking on financial risks in the hope of a profit.* According to the Global Entrepreneurship Monitor, early-stage entrepreneurial activity is surging worldwide. In the US, alone, it’s up 60% since the start of the recession.
What Do People Become Entrepreneurs?
The popular conception is that people become entrepreneurs because they want to be their own boss (a pull factor). However, the current reality is that most entrepreneurs are motivated by necessity, rather than opportunity (a push factor). Here are some more reasons why people are embracing entrepreneurship:
- Jobs lost in corporate sector
- Erosion of long-term job security
- Desire to pursue own ideas.
Characteristics of an Entrepreneur
Not everyone is cut out for entrepreneurship. Entrepreneurs are a special breed of people and the very things which make them good at entrepreneurial activity can make them terrible employees or managers! Entrepreneurs are:
- Highly independent
The Ins and Outs of Entrepreneurship
While solid data on the state of entrepreneurship in South Africa can be hard to come by, these nuggets from the Kauffman Index of Entrepreneurial Activity in the US makes interesting reading:
- In 2011, in the US, entrepreneurship was at its highest level in sixteen years
- New entrepreneurs are more likely to do the job alone than hire help – entrepreneurship appears to be meeting personal needs but isn’t growth oriented, although that may change over the next few years
- Entrepreneurs are more likely to be immigrants
- Entrepreneurship is highest in the 45-55 year old age group
- Entrepreneurship is lowest in the 20-34 year old age group
- Entrepreneurship is highest amongst high school dropouts than any other education group.
Sadly, the Global Entrepreneurial Monitor only ranks South Africa number 30 out of 42 countries when it comes to overall entrepreneurial population, so we’re not quite with the global trend yet. Work to be done, folks, particularly with our unemployment rate hovering around 25%.
What Are Entrepreneurs Doing?
Research by the Kauffman Index of Entrepreneurial Activity suggests that people tend to become entrepreneurs after gaining 10-12 years working experience. Top business areas for entrepreneurs in the US are:
- Consultancy businesses in an individual’s specific area of expertise
- Consumer-oriented businesses
- Online businesses on platforms like Etsy and eBay
- Direct sales companies, like Avon or Tupperware.
Did You Know?
Entrepreneurship is hard work! Self-employed people work on average 4.4 hours per week more than their counterparts in permanent employment.