Why are entrepreneurs important?

Who are entrepreneurs?
Entrepreneurs ...
• create and grow enterprises. (Kellogg Foundation)
• organize and manage a business undertaking, assuming the risk for the sake of the profit. (Webster’s New World Dictionary)
• develop innovations, create jobs, and contribute to a more vibrant national and global economy. (Kauffman Foundation)

Why are entrepreneurs important?
Economist David Birch estimates that on average, 7 percent to 8 percent of jobs are lost in a local economy each year due to the natural cycling of firms. Typically, the new jobs that replace those lost are coming from expansion of existing small businesses (55 percent), from new business start-ups (44 percent), and from business relocations (1 percent). Research also strongly correlates the level of entrepreneurship to overall economic growth.

The Small Business Administration’s data indicate that small businesses:
• Represent 99.7 percent of all employer firms.
• Employ half of all private-sector employees.
• Pay more than 45 percent of the total U.S. private payroll.
• Have generated 60 percent to 80 percent of net new jobs annually over the last decade.
• Create more than 50 percent of nonfarm private gross domestic product (GDP).
• Supplied more than 23 percent of the total value of federal prime contracts in FY 2005.
• Produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be among the 1 percent most cited.
• Are employers of 41 percent of high-tech workers (such as scientists, engineers, and computer workers).
• Are 53 percent home-based and 3 percent franchises.
• Made up 97 percent of all identified exporters and produced 28.6 percent of the known export value in FY 2004.