Necessity may be the mother of invention, as Plato once said, but it seems that most business owners launch their own companies not because they have to, but because they have the opportunity to do so, a new study determined.
Globally, roughly 75 percent of business owners say they decided to launch their entrepreneurial careers primarily because it was an option that was available to them, based on findings from Babson College and the London Business School. Respondents from 54 economies around the world were factored into the analysis, accounting for 86 percent of the world’s gross domestic product.
“Innovation is highest in North America.”
True to its Land of Opportunity nomenclature, the U.S. is home to the greatest level of innovation of the economies analyzed, the report found. This metric was based on how many new, or one-of-a-kind products businesses are producing at any given time.
Donna Kelley, Babson College professor and member of the board of directors of the Global Entrepreneurship Research Association, indicated companies operating out of the U.S. and Canada are the runaway world leaders in entrepreneurial ingenuity and productivity.
The high levels of innovation, growth-oriented entrepreneurship, and startup activity in technology, finance, and professional service sectors distinguishes entrepreneurship in North America from other regions,” Kelley explained. “Entrepreneurs here are key drivers of knowledge and human capital-based business activity. They are improving people’s lives through new and advanced products and services, creating jobs, and demonstrating clear impact not only within their society, but around the world.”
Nearly 150,000 jobs created by SMBs in January
Employers – small and midsized businesses, in particular – made more work opportunities available to people on the job hunt to kick off 2018. In January, business owners created 234,000 positions for the private sector, according to newly released figures from the ADP Research Institute. These additions were across the board, with 58,000 created by small-business owners, 91,000 by midsized and 85,000 by large employers.
Accounting for the vast majority of these gains was the service-providing sector. Indeed, 212,000 jobs in January were in this segment of the economy, led by trade, transportation and utilities at 51,000, followed by 46,000 in education and health, according to the ADP report.
Job growth among industries specializing in the production of goods was also robust, up 22,000 in January, with manufacturing accounting for more than half of the jobs created.
SMBs in the manufacturing sector, which accounts for roughly 9 percent of total U.S. employment, according to the Economic Policy Institute, have a lot to live up to in 2018 after a solid 2017. Manufacturers added an estimated $2.25 trillion in new wealth to the economy, which is an all-time high.
“It’s good news for all Americans – and something worth celebrating,” said Jay Timmons, CEO and president of the National Association of Manufacturers. “It’s further evidence that manufacturing in America is growing stronger by the day – in no small part because we have leaders in Washington who are making American manufacturing workers a top priority.”
The official report regarding job creation in January is due out Feb. 2 from the Labor Department, and economists are encouraged by what they expect the data to show. In a poll administered by The Wall Street Journal, the economists surveyed anticipate nonfarm payrolls rising by 177,000 for the first month of the year, with the unemployment rate holding at a 18-year low (4.1 percent).
If their predictions prove accurate, the total would be down from last year at this time, when employers added 187,000, but up from December, when job gains amounted to 148,000.
Increased hiring trend to last awhile
SMBs are expected to continue hiring well into the future, particularly in the U.S., according to the joint report from Babson College and the London Business School. Nearly 40 percent of entrepreneurs anticipate a net gain in job creation over the next five years, with 21 percent of SMBs in Asia expecting overall growth.
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