Despite worries that the US economy is weaker than most people believe (50%), entrepreneurs participating in the survey indicated that they think the US economy will continue to be the world's strongest (54%). The majority (61%) founded their companies in a healthier economic time, but overwhelmingly (92%) stated they would have founded their company regardless of the state of the economy.
Although entrepreneurs are active in the political sphere, those participating in the survey believe the government could do more to support new businesses. Respondents overwhelmingly (72%) stated that the government doesn't do enough to support entrepreneurs; 73% are personally involved in public policy issues and 64% have petitioned a politician for policy change.
More than half (53%) of entrepreneurs surveyed think the most important contribution they make to the US economy is to create jobs. Additionally, almost one-third of those surveyed (28%) believe the most significant contribution entrepreneurs can make is to promote innovation and improve quality of life for their customers. Those surveyed contribute to charity; 44% donated $50,000 or more in the past year.
"The American economy is built on the backs of entrepreneurs," said Larry Haynes, Americas Director, Ernst & Young LLP Entrepreneur Of The Year program. "This survey illustrates the contribution entrepreneurs make by creating jobs, improving local communities and bolstering the larger US economy. They are ready to make adjustments and continue striving for growth and success; in fact, nearly three-quarters of entrepreneurs we surveyed believe they will innovate and find opportunities in the current economy."
Coping with economic challenges
Entrepreneurs have already taken steps to adjust to the economic downturn. In the last 24 months, 44% of survey participants reduced spending, 29% reduced their workforce and 29% refinanced debt. On a positive note, 32% sought acquisitions and 67% said they increased the number of employees by an average of 14% in the past year. Respondents are particularly concerned about the cost of health care and energy; 50% and 49%, respectively, reported those issues as having the most significant negative effect on their companies. Health care costs for respondents' companies, for example, rose an average of 15.49% per company last year.
When it comes to seeking additional funding, entrepreneurs participating in the survey indicated that they are looking towards private equity (73%). Another 12% would consider a private wealth fund infusion. Twenty-seven percent postponed an IPO or another strategic transaction in the last 24 months.
Entrepreneurs evaluating business response to climate change
While only 20% of responding entrepreneurs say their executive management and board completely understand climate change legislation and risk, 30% of respondents think the impact of climate change is very important to their companies. Entrepreneurs participating in the survey are not sure how to respond to climate change, however - 31% view assessing the impact of climate change as a challenge.
Over half of respondents (51%) say they have increased their focus on climate change in the past 2 years, but 53% say they do not spend any money on climate change related activities. Another 41% do not plan to spend on climate change related activities in the next 5 years. Activities reflect more cost savings than investment; those who do plan to allocate funds to address climate change will spend their money identifying cost savings/efficiency opportunities (53%), integrating clean technologies into internals or supply chain systems (32%), or creating new or modified internal policies and procedures (29%).
