About This Project
The information on this website is an effort to inform Missourians about the
characteristics of entrepreneurs in their communities. Information on this page can be used
by workforce planners and economic developers who wish to promote entrepreneurship in their
region as well as by small business owners, researchers and individuals who wish to
identify, and perhaps work with, entrepreneurs in their region. The data contained in this
website is unique in that it is standardized across the state and that it can also be
obtained for all states in the country. The project is a joint collaboration between the
Office of Social and Economic Data Analysis (OSEDA)
and the Missouri Economic Research and
Information Center (MERIC).
Definition of Entrepreneurs
In the report State Entrepreneurship Policies and Programs,i the Ewing Marion Kauffman
Foundation defines entrepreneurship as:
The ability to amass the necessary resources to capitalize on new business
opportunities. The term is frequently used to refer to the rapid growth of new and
innovative businesses and is associated with individuals who create or seize business
opportunities. They build something from practically nothing and usually reinvest earnings
to expand their enterprise or to create new enterprise.
The argument has been made that while most entrepreneurs start by forming small
businesses, not all small businesses are entrepreneurial and that only founders of high
growth companies can be considered to be true entrepreneurs. Typically companies with high
entrepreneurial growth are considered to be those companies that grow between 15-20
percent per year in either revenues, employment, or both.ii
However, for purposes of this research, full-time entrepreneurs are defined as those
individuals that either report over
50 percent of their income as self-employment income or who classify themselves as
self-employed, in either an unincorporated or incorporated business or company. (Part-time
entrepreneurs report 20-50 percent of their total income as unemployment income.) These
definitions were chosen in large part due to data restrictions and the fact that it was not
possible to track the growth of companies over time in conjunction with the socioeconomic
data collected by the Public Use Microdata Sample of the U.S. Census. Another important
reason for using a broad definition of entrepreneurship is that even small businesses which
are not high growth businesses produce jobs for Missourians and create activity in the local
economy. In fact, Missourians who are small business owners have, on average, significantly
higher salaries than Missourians who are employed as wage labor.iii
Full-Time Entrepreneurs are defined as those individuals who either report over 50
percent of their total income as self employment income or who classify themselves as self
employed in either an incorporated or an unincorporated business.
Part-Time Entrepreneurs are defined as those individuals who report between 20 and
50 percent of their total income as self employment income. Since many full-time business
owners begin with a part-time business, the goal of the part-time self employment
classification is to identify industries and occupations within regions that have the
potential for significant business ownership and self employment income.
Methodology
Data in this website is obtained from the U.S. Census Bureau's Public-Use Microdata Samples
(PUMS) files. These files contain records for a sample of housing units in Missouri with
information on the characteristics of each unit and each person in it. The microdata files
are especially relevant for the data presented on this website because they allow
statistical summaries of detailed information such as occupation, employment, socio-econmic
status, and earnings at an individual level. The data contained on this site is derived from
the person records of the Five Percent Public-Use Microdata Samples (PUMS). The five percent
files are collected using Public Use Micro Areas (PUMA) which are defined by the U.S.
Census. PUMA regions for the five percent file contain between 100,000 and 200,000 people.
Because of their population requirement they are different than the standard geographies
(counties and metropolitian statistical areas) which are used to describe Missouri. However,
whenever possible, PUMAs have been structured so that they do not cross Metropolitian
Statistical Areas (MSAs) or county lines.
i Kayne, Jay. State Entrepreneurship: Policies and Programs, Kauffman
Center for Entrepreneurial Leadership, 1999.
ii Fostering Entrepreneurship: Creating a Supportive
Environment for Entrepreneurship in Missouri. Missouri Business Center and the Missouri
Economic Research and Information Center. November 2002.
iii DeMaio, Lucia. Latino Entrepreneurs in Missouri: Policy
Implications for Small Business Assistance Programs. Missouri Economic Research and
Information Center, April 2005.
