Coming Soon: the First-Ever Kauffman Index of Growth Entrepreneurship

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The Kauffman Index Growth EntrepreneurshipUnicorns, gazelles, dragons, silent killers, scaleups. There are tons of ways to think about growth entrepreneurship. There are not, however, many ways of measuring it in our ecosystems. The Kauffman Index of Entrepreneurship Series is based on extensive research and attempts to present a balanced perspective on how to do just that.

As entrepreneurs, entrepreneurship supporters and policymakers, how are we supposed to know what kind of growth entrepreneurship is actually going on? There is plenty of anecdotal evidence around, but most ecosystems struggle to answer straightforward, yet elusive, questions: How fast (or slowly) are our startups growing? How is our region faring compared to other places? More importantly, how do we measure the stuff that actually matters for the end goals of entrepreneurship – things like innovation, wealth and job creation?

To help answer these questions and address these challenges, we are introducing the first-ever Kauffman Index of Growth Entrepreneurship — the third of various research installments under the umbrella of the new Kauffman Index of Entrepreneurship Series. Sign up below to get the May 19 national findings and the state and top 40 metro findings on June 2.

Understanding Growth Entrepreneurship

The Growth Entrepreneurship Index is the first and largest index tracking growth entrepreneurship across all 50 states, the largest metros in the country, and the nation as a whole. This Index takes a dual approach to understanding growth business activity, focusing on both revenue and employment growth. It relies on three indicators to do that:

  • Rate of Startup Growth — how much, on average, startups in the United States grew in their first five years after founding measured by employee count
  • Share of Scaleups – the number of businesses starting small and growing to medium-sized or larger (employing 50 or more people) by their 10th year of operation
  • High-Growth Company Density – the prevalence of fast-growing, private companies in a region – businesses with at least 20 percent annualized growth over three years and $2 million in annual revenue.

In addition to these measures, we also present industry trends for high-growth companies and a look at IPO activity across the nation.

While we do not pretend this report will answer all the questions we have – nor do we intend it to – we believe it is an important step in measuring growth entrepreneurship and focusing our attention on the entrepreneurial outputs that are relevant to most of us trying to understand growth entrepreneurship.

Join the conversation

Since we launched the new series in 2015, the data tools and research have been widely used by various groups. In the policy world, the Kauffman Index has been referenced in testimonies to the U.S. Congress, by federal agencies like the Small Business Administration (SBA) and by various state and city governments. At the entrepreneurship support level, organizations from Charlotte, North Carolina, to Pittsburgh, Pennsylvania, are using it to better understand and measure their ecosystems. Among private companies, businesses from startups to growth companies like Square, to Fortune 500 businesses like Microsoft and Staples look to the data to help inform their decision-making. In media circles, the Kauffman Index has been highlighted in hundreds of print, radio, TV and online media outlets. This has included most major publications, like Bloomberg, the Economist, CNBC, the New York Times, the Wall Street Journal and USA Today.

We recognize that entrepreneurship is a complex phenomenon, we expect to further revise and enhance the Index in the coming years. So, please, let us know what we are missing.

We sincerely hope this can be helpful to you in your work in whatever region you are focusing on – be it, your city, your state, your region, or the nation. And we hope we can continue the dialogue on how we can create better tools to help you foster the next generation of entrepreneurship ecosystems in the America.

The specific indicators from each Kauffman Index report help tell the story American entrepreneurship. We have already released reports on Startup Activity and Main Street Entrepreneurship. National, state and local leaders can access all the reports, along with the data relevant to their locales, at www.kauffmanindex.org. The Kauffman Index Series, the umbrella under which the new Growth Entrepreneurship Index resides, was introduced last year, building on top of the decade-long work by Robert W. Fairlie with the original Kauffman Index of Entrepreneurial Activity.

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