In the midst of recession and burdensome policies, entrepreneurship survives

Raymond Keating

Even amidst the economic gloom, entrepreneurship finds a way.

Keep in mind that it remains a tough environment for many entrepreneurs to raise capital and gain access to credit.

The number of incorporated self-employed fell in 2009, while the number of unincorporated self-employed has fallen for three straight years. Proprietor income also declined in 2009.

And, of course, millions of jobs have disappeared since late 2007. According to the government’s household survey, after four months of employment growth at the start of 2010, data for May and June revealed a decline in employment of 336,000, with the labor force falling by 974,000.

All of this indicates stagnation or decline in terms of entrepreneurship and an increasing number of discouraged workers.

However, there are still bits of good news about entrepreneurship to be found.

In fact, even in one of the worst policy climates for entrepreneurship in the nation in New York — coming in at 48th, or fourth worst, on the 2009 Small Business Survival Index, which ranks the states and District of Columbia according to their respective policy costs — one can find individuals who lost their jobs, and as a result, have turned to entrepreneurship.

A recent issue of Newsday, for example, included an interesting report titled “Setting out on their own.” The piece highlighted various individuals who went from the unemployment line to starting up their own businesses. That included a chef who competed on Fox’s “Hell’s Kitchen,” but lost her spot at a Manhattan restaurant. She wound up opening her own catering business. Another person went from being a bookkeeper and office manager to operating her own Internet marketing firm.

The most encouraging example was that of a bookkeeper who lost her job 16 years ago at a supermarket that closed up its stores on the East End of Long Island. The supermarket had delivered groceries. The bookkeeper, Josephine Amplo, grabbed the opportunity to fill the market, and now delivers groceries, prescriptions and dry cleaning with 16 part-time employees.

Among the bits of interesting data in the story were:

New business growth is running 25 percent ahead of the same stretch last year on Long Island.

According to SCORE Long Island, 70 percent of those looking for advice on business plans and lending to small businesses are unemployed, compared to the usual 20 percent.

From 2000 to 2008, self-employment increased more than 25 percent for those with a bachelor’s degree and beyond, according to the

U.S. Small Business Administration Office of Advocacy. But self-employment rose just 3.6 percent for those with a high-school diploma or less.

As usual, startup entrepreneurs turn to friends and families to get the businesses off the ground.

Entrepreneurs truly are a hearty bunch. If only places like New York did not make it so incredibly costly from a tax and regulatory perspective to build a business, drive economic growth and create jobs. Imagine how much better off we would all be.

Raymond Keating is chief economist for the Small Business & Entrepreneurship Council. Reach him through the Web site at