Fewer Veterans Are Starting Businesses

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In 1996, military veterans founded one out of every eight new U.S. businesses, according to the Kauffman Foundation (PDF). Last year, the figure was close to one in 20. Veterans are reaching retirement age faster than they are entering the workforce, creating opportunities for veterans to launch companies that contract with the government. What?s going on?

Here?s a closer look at entrepreneurship rates, showing the average percentage of working-age adults who start a business each month. Kauffman calls this the Index of Entrepreneurial Activity (PDF), and it shows veteran startup rates declining even faster than the rate for non-veterans.

The obvious explanation is demographic. Seven million veterans have turned 65 since 1999, according to (spreadsheet) the Department of Veterans Affairs. An additional 6 million will reach the traditional retirement age over the next 15 years. Recent wars in Iraq and Afghanistan mean that more veterans entering the workforce, though not enough to replace those leaving it.

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