Nationally, startup activity rose for the first time since 2009.
More than half of the 50 U.S. states saw a resurgence of startup activity last year, according to the 2015 Kauffmann Index: Startup Activity. Startups trended upward in 32 of the 50 U.S. states last year as well as in 18 of the nation’s top 40 metropolitan areas. Nationally, startup activity rose for the first time since 2009.
Startup activity tended to be highest in the western and southern states overall. The five states with the highest startup activity last year were:
- North Dakota
The high level of startup activity in these states is likely associated with the high real GDP growth most of these states have recently experienced, the report stated.
South Carolina led the states with the biggest increases in startup activity, 17 points, followed by Oklahoma (15), Nevada (11) and Illinois (9). All four states are ranked in the top 30 states for startup activity.
California, Missouri, New Hampshire, Maine and Connecticut suffered the biggest drops in rank.
“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,” Dane Stangler, vice president of Research and Policy at the Kauffman Foundation, said in a statement.
The Kauffmann Index: Startup Activity considers three variables at the national, state and metropolitan levels: the rate of new entrepreneurs, opportunity share of new entrepreneurs, and startup density.
The cities that ranked best for startup activity were:
- Austin, TX
- San Jose, CA
- Los Angeles
Eighteen of the metro areas studies posted improved startup activity over the prior year. Columbus, OH posted the biggest positive shift in rank (10 points), followed by Boston (9), Chicago (8), Atlanta (5) and Virginia Beach (4).
Conversely, the states with the biggest negative shift in rank for startup activity were Orlando
(-12 points), Riverside, CA (-7), Sacramento (-7), Tampa (-5), and Nashville (-4)
“Historically, the Plains and Rocky Mountain regions have not been thought of as hotbeds of entrepreneurial activity,” Arnobio Morelix, research analyst at the Kauffman Foundation, and one of the studies’ authors, said “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.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.