Entrepreneurial Spirit In The U.S. Hits Record High, Babson’s Latest GEM Report Finds

Entrepreneurship in the United States is surging to historic levels, with new business creation rebounding to an all-time high, according to the Global Entrepreneurship Monitor 2024 United States Report released Wednesday (March 26) by Babson College.

The report shows that 19% of U.S. adults are currently in the process of starting or running a new business — matching the record level from 2022. But while entrepreneurial activity is growing, the number of mature businesses continues to lag, with fewer than 7% of Americans operating established firms.

“This is a powerful indicator of the creativity and ambition of American entrepreneurs,” says Professor Donna Kelley, who leads Babson’s GEM U.S. research. “We’re seeing broader participation across age, race, gender, and background — including military veterans, immigrants, and younger Americans — who are all playing an important role in driving innovation and economic growth.”

DIGITAL TECH & AI RESHAPE ENTREPRENEURSHIP

Babson is a renowned entrepreneurship school, topping U.S. News’s specialization ranking for more than 30 consecutive years. The Boston school is 13th in P&Q’s most recent ranking of entrepreneurship programs.

For the first time, this year’s GEM report included a deep dive into digital technology and artificial intelligence, revealing how U.S. entrepreneurs are rapidly adopting new tools to drive growth and efficiency.

• AI is being used by 63% of entrepreneurs and 49% of established business owners

• Over 80% of entrepreneurs say AI is already having a positive impact on revenue, productivity, and customer engagement

• Nearly 70% of entrepreneurs now rely on digital platforms for at least one-quarter of their sales

• Use of data analytics (81%), cloud services, and customer relationship tools (77%) is widespread and growing

Despite these advances, entrepreneurs voiced concerns around data security and privacy, with 86% acknowledging potential risks in adopting AI technologies.

JOB SCARCITY & YOUTH DRIVE STARTUPS

More than two-thirds of entrepreneurs said job scarcity played a key role in their decision to launch a business. Meanwhile, the highest rates of entrepreneurial activity were seen among 18- to 34-year-olds, signaling a generational shift in how and when Americans choose to enter the business world.

Entrepreneurship was found to be evenly distributed across education and income levels, with participation growing across all demographics — including among military personnel and U.S. citizens born abroad.

DIVERSITY & PURPOSE FUEL A NEW GENERATION

Entrepreneurship in the U.S. is also becoming more inclusive. Black and Hispanic adults were more likely than white peers to view entrepreneurship as a good career path, and Black Americans reported the highest rates of entrepreneurial activity and intent among all racial groups.

Women narrowed the gender gap in key areas, especially in global reach. 27% of women entrepreneurs now operate with international market scope — matching men for the first time.

In addition, the report highlights a growing values-driven shift:

• 60% of new entrepreneurs and 47% of established owners now prioritize social and environmental impact over profit

• A record 62% are taking steps to minimize environmental harm, while 59% aim to maximize social good

• Younger entrepreneurs (ages 18–34) lead the trend in sustainability and social impact initiatives

OPTIMISM TEMPERED BY STRUCTURAL CHALLENGES

While societal support for entrepreneurship remains high — 82% of Americans say it’s a good career choice — many still see major barriers. Only 57% believe it’s easy to start a business, and among those who perceive opportunity, nearly 44% cite fear of failure as a reason not to act.

On the financial front, 14% of Americans invested in an entrepreneur in 2024, with most support going to relatives. However, funding remains unequally distributed: just 37% of these investments went to women, and only 14% of male investors supported women founders.

A CLEARER PICTURE OF THE FUTURE

As entrepreneurship expands across demographics and industries — from retail to high-tech — Babson’s Kelley believes the next wave of growth will depend on how well entrepreneurs and policymakers respond to shifts in technology, sustainability, and workforce needs.

“The future of entrepreneurship is not just about starting businesses,” she says. “It’s about building resilient, innovative, and inclusive ecosystems that can adapt to rapid change and serve a larger purpose.”

The full GEM 2024 United States Report is available here.

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