Montana, Wyoming Lead States in Startup Activity
Austin, Texas Silvio Ligutti / Shutterstock.com
In a Kauffman Foundation report, Austin, Texas, is the top metro for new businesses with the highest rate of new entrepreneurs.
The number of startups grew in 2014 for most states and major metropolitan areas, particularly in the West and South, according to the Kansas City-based Kauffman Foundation’s annual startup activity index released Thursday.
New businesses increased in 32 states and 18 of the top 40 metro areas, reversing a five-year U.S. decline.
Driving the startup surge were male entrepreneurs, hit hard during the Great Recession, and immigrant entrepreneurs, who continue to fare well, per the report.
“There’s been an explosion of entrepreneurship programs and events across the country in recent years, and while we don’t fully understand their impact, last year’s rebound in new business creation is a good sign,” said Dane Stangler, vice president of research and policy, in a statement. “State and local leaders need to understand how many startups they have in their regions and who’s starting them so they can make decisions on how to build on what they currently have.”
Austin, Texas; Miami, Florida; San Jose, California; Los Angeles, California; and Denver, Colorado were the best large metros for startups, in that order.
Aside from ordering, the top 10 metros didn’t change from 2013 with San Francisco, California; New York, New York; Houston, Texas; San Diego, California; and San Antonio; Texas the next five best.
Austin’s success can be attributed to the city having the highest rate of new entrepreneurs—550 per every 100,000 adults in a given month. While Miami boasted the highest startup density of 247.6 per 100,000 people.
The “heart of Silicon Valley,” San Jose’s strong point was only one out of every 10 new entrepreneurs came from unemployment.
A different set of metros were the index’s biggest movers in 2015:
While the metros that saw the greatest decline in startup activity generally struggled promoting new entrepreneurship, like Nashville, Tennessee having the lowest opportunity share of new entrepreneurs at 60 percent—four out of every 10 previously unemployed.
And why did state stars include newcomers Montana and Wyoming—Nos. 1 and 2 respectively—ahead of regulars Colorado and Florida?
“Historically, the Plains and Rocky Mountain regions have not been thought of as hotbeds of entrepreneurial activity,” research analyst Arnobio Morelix said in a statement. “But entrepreneurship is closely associated with economic growth, so it should not be surprising that some of the states seeing increased levels of startup activity have experienced high rates of real GDP expansion in recent years.”
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