A new report shows that many of the 15 million unemployed Americans weren’t just sitting around last year. They were creating their own jobs.

The annual index of entrepreneurial activity published by the nonprofit Kauffman Foundation shows that the pace of new-business creation last year was the highest since the index began 14 years ago. It’s not clear why there would be so many startups in the midst of a brutal recession, but it stands to reason that many new business owners these days are “necessity entrepreneurs”—people laid off from conventional jobs, with few other opportunities. “Either these people can’t find jobs, or they’re incredibly motivated to start businesses,” says Bob Litan, vice president for research and policy at Kauffman. “I suspect it’s a combination of both.”

Entrepreneurial activity often rises when traditional jobs disappear, but the past two years have been notoriously tough on small businesses. So it’s too early to declare that a new army of entrepreneurs will save the American economy. Consumers have curtailed spending, for one thing, hitting businesses from dry cleaners and nail salons to Silicon Valley tech startups. But the biggest problem has been the credit crunch. Banks essentially stopped lending during the 2008 financial crisis, and while big companies can now get loans, many small businesses—often financed with personal loans or credit cards—still can’t. White House economic advisor Larry Summers said a few weeks ago that “there’s a Great Recession everywhere. There’s a quiet depression in small business.”

Source: USNews.com