New Global Entrepreneurship Monitor (GEM) Report from Babson College Shows Strong Startup Activity Amid Growing Challenges for U.S. Entrepreneurs

Wellesley, Massachusetts--(Newsfile Corp. - March 30, 2026) - Today, Babson College released the Global Entrepreneurship Monitor (GEM) United States 2025-2026 Report, revealing that entrepreneurial activity in the U.S. remains near historic highs even as founders face increasing barriers related to financing, policy uncertainty, and long-term business sustainability.

The report, part of the world's largest ongoing study of entrepreneurship, shows that 18.5% of U.S. adults are engaged in early-stage entrepreneurship—meaning nearly one in five Americans is starting or running a new business—yet far fewer ventures are reaching long-term stability, with established business ownership at 8.9% and business closures rising to 3.5%. The findings highlight a growing gap between startup creation and sustainable business growth across the U.S. economy.

Produced annually by Babson College as part of the global GEM research consortium, the report draws on a nationally representative survey of more than 11,000 U.S. adults, along with a complementary National Expert Survey assessing the conditions that shape entrepreneurship.

"Entrepreneurship remains a defining strength of the U.S. economy," said Donna Kelley, professor of entrepreneurship at Babson College and GEM U.S. lead researcher. "But the data also show a widening gap between startup creation and long-term business survival, pointing to the need for stronger support systems that help entrepreneurs build durable, sustainable ventures."

Key Findings from the 2025-2026 GEM United States Report:

• Startup momentum remains strong—but long-term sustainability remains a challenge
  • While nearly one in five Americans is engaged in starting or running a new business, far fewer ventures are reaching long-term stability. The report highlights a growing gap between startup creation and established business ownership, with many entrepreneurs citing lack of profitability and difficulty accessing financing as key reasons businesses close.
• Entrepreneurial optimism remains high, even as conditions grow more challenging
  • Americans continue to view entrepreneurship positively, but perceived ease of starting a business declined compared with prior years. Just 54.3% of U.S. adults said it would be easy to start a business in 2025—down from 2024 and nearly 30% lower than pre-pandemic levels—reflecting increasing complexity in regulatory, financial, and operational environments.
• Entrepreneurship is young and increasingly diverse
  • Entrepreneurial activity is particularly strong among younger adults and underrepresented groups. More than 20% of adults ages 18-34 are engaged in entrepreneurship, while startup rates are also high among Black and Hispanic Americans and currently serving military personnel, highlighting new pipelines of entrepreneurial talent across the country.
• Regional differences in entrepreneurship are widening
  • The South and West continue to lead the nation in startup activity, while the Midwest reports the lowest levels of entrepreneurial activity and confidence—suggesting that place-based ecosystem investments may play an important role in strengthening national economic growth.
• AI and digital tools are becoming core infrastructure for new businesses
  • Entrepreneurs are adopting technology rapidly, with more than 95% using digital tools and roughly 40% reporting the use of AI technologies in their ventures. However, concerns around data security, implementation costs, and ethical considerations remain top barriers to broader adoption.
• Most U.S. startups are still self-funded—and access to capital remains uneven
  • Despite the visibility of venture capital and angel investment, the report shows that most U.S. entrepreneurs continue to fund their businesses themselves. About 65% rely on personal savings, 34% use credit cards, and 25% access bank loans, while fewer than 10% receive angel or venture capital investment.
  • Women entrepreneurs are also more than 15 percentage points less likely than men to access external financing, highlighting persistent disparities in access to capital.

About the Global Entrepreneurship Monitor

The Global Entrepreneurship Monitor (GEM) is the world's largest and most comprehensive study of entrepreneurship. Babson College has led the GEM United States research effort since 1999, providing policymakers, educators, and business leaders with globally comparable data on entrepreneurial attitudes, activity, and aspirations.