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Entrepreneurs optimistic heading into 2012 survey says

Posted by: Brian O'Connell on December 23, 2011 Source: Kauffman Foundation

Healthcare entrepreneurs have much to mull over as they sip their eggnog (or possibly something stronger) this holiday weekend, as 2011 draws to a close.

It’s pretty much a mixed bag for the industry, as financing for life sciences firms fell 18 percent from the second to third quarter of 2011, and saw its lowest level of volume since early 2005.

Healthcare stocks, as measured by the benchmark iShares Dow Jones US HealthCare Fund (IYH), have experienced a roller coaster year, rising from $66 in January to $74 in August, before dropping like a stone to $62 and then climbing back to $70 at year-end.

But despite a rocky road in 2011, some entrepreneurs believe things will get better in 2012.

That’s the takeaway from a new study, The Global Entrepreneurship Monitor Massachusetts 2010 Report.

The study, sponsored by Babson College, only looks at Massachusetts startups, but the state is one of the leading lights in the healthcare industry, and should serve as a benchmark for the entire market.

“We are delighted to see the awareness and energy around entrepreneurship both as a career path and as a mechanism to advance business development in a whole array of organizations in the Commonwealth,” said Babson College President Leonard Schlesinger, in a statement.

So what does the study show? In a word, plenty. Here’s a thumbnail sketch from the Babson survey:

  • A significant number of entrepreneurs 45 and older (17 percent) are starting businesses. Still, more entrepreneurs 35 and younger take on early-stage ventures.
  • Entrepreneurial ventures both early and established are principally run by a single autonomous founder.
  • More entrepreneurs are network savvy with 58 percent knowing other entrepreneurs, while among the non-entrepreneurship population, less than 25 percent know another business owner.
  • Entrepreneurs are multitaskers. Nearly half of all early-stage and established entrepreneurs have another primary business to fall back on.
  • Massachusetts entrepreneurs are cautiously optimistic about startup opportunities. Early-stage entrepreneurs are the most positive and predict significant growth in the next five years.
  • Entrepreneurial awareness is high in Massachusetts. Sixty-five percent of non-entrepreneurs report that starting a business is a good career choice and 77 percent believe that a successful new business leads to a higher socioeconomic status.
  • Innovation drives the creation of new firms, but 2010 saw a decrease in innovation among both early-stage (50 percent) and established businesses (84 percent).

The overall business outlook among Massachusetts’ new business owners is cautiously bullish – but there are a few caveats.

Study participants say that, to succeed, new startup owners need access to resources and programs (both public and private) that raise awareness of entrepreneurship as a realistic career choice among non-entrepreneurs, and help non-entrepreneurs understand how to identify, analyze and create opportunities.

2011 wasn’t the best year for entrepreneurs, but the early outlook for 2012 is partly sunny with a chance of more profits.

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