Entrepreneurship
In 2021, the number of business starts exceeded closures by 71%, up from 12% in 2020.
Favorable movement since the last available data
Benchmark: Maine’s ratio of business start-ups to closures will be positive and equal to or above the national average.
Overview
This entrepreneurship metric compares the number of business establishments that are started in Maine each year with the number that close. It includes any establishment with employees covered by unemployment insurance. A start-up-to-closure ratio greater than 1 means more businesses are being created than closed each year.
In 2021, Maine’s ratio of start-ups to closures was 1.71, meaning 71% more businesses were created (7,867) than closed (4,594). This is a huge increase from 1.12 in 2020, and above the U.S. ratio of 1.49. It reflects a sharp jump in business creations; the number of closures was relatively similar to previous years.
The creation of new businesses is a vital economic activity. Entrepreneurship contributes to innovation, creates jobs, and builds wealth. In a vibrant economy, people have the skills to identify and respond to business opportunities, access to capital, supports for starting and scaling businesses, and connections to human capital.
Fig. A
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Ratio of Business Start-ups to Closures
U.S. Bureau of Labor Statistics, Business Employment Dynamics