US entrepreneurial activity is near a record high -- but that headline number is silent on the thing that actually matters for evaluating it: whether people are running toward an opportunity or away from a shortage. The Global Entrepreneurship Monitor asks founders directly. In 2022 and 2023, job scarcity was the single largest stated reason for starting a business, at 62.5%. By the 2024-2025 survey, GEM reports over two-thirds -- and separately states that's more than a one-third increase since 2021.
This isn't a new pattern -- GEM's own historical data shows the same necessity spike after 2008, receding only as the labor market recovered. It also overlaps with the fastest rate-hiking cycle on record (2022-2023). None of that draws a straight line from any one rate decision to any one founder's decision -- but the correlation is real and has repeated before.
The practical read: a high formation rate in a tight labor market isn't automatically a sign of opportunity-rich founders with genuine conviction. A meaningful share of the pool you're screening right now started because the alternative was worse, not because the idea was undeniable -- worth a real question in diligence, not an assumption either way.
Sources and further reading: GEM USA 2024-2025 Report (Babson College / Global Entrepreneurship Monitor) · "Total Entrepreneurial Activity at an All-Time High in the USA". Full version: "Forced to take that route" on our research site.