Advocacy Report Shows Rural Entrepreneurship Has Been Declining

WASHINGTON, D.C. – Rural America has historically had a higher rate of entrepreneurship than urban and suburban areas. But the rural lead is shrinking. A new report by the SBA Office of Advocacy tracks these shifts over nearly 30 years. The report, “The Retreat of the Rural Entrepreneur,” tracks self-employment data from the U.S Census Bureau’s Current Population Survey. According to the author, Daniel Wilmoth, “In 1988, more than 1 in 4 self-employed workers lived in a rural area, but, by 2016, that had fallen to less than 1 in 6.”

According to the report, the decline was driven by two factors: a shift of the working-age population away from rural areas and a decrease in the rate of rural self-employment.New businesses are important sources of new jobs and new products, but entrepreneurship has been declining in the United States. The patterns that emerge in this report suggest that changes in rural areas may be contributing to the decline. Policies facilitating the economic development of rural areas could be an effective tool for reversing the decline.

The challenges facing rural America are the focus of a recent Executive Order, Promoting Agriculture and Rural Prosperity in America, which was issued in April and established a task force led by the U.S. Department of Agriculture. The Small Business Administration is one of 22 participating federal agencies.

The report, “The Retreat of the Rural Entrepreneur,” is available on the Office of Advocacy website. It is part of a series examining trends in U.S. entrepreneurship. Other reports in the series have examined entrepreneurship among millennials, seniors, and immigrants. Resources from the Small Business Administration for aspiring entrepreneurs are available on SBA’s webpage.

For more information, visit the Office of Advocacy website at www.sba.gov/advocacy.

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