The Kauffman Index of Growth Entrepreneurship: Metropolitan Area and City Trends
The reports present trends in Growth Entrepreneurship in each state and the 40 largest metro areas relying on three composite indicators to look at business revenue and job growth: Rate of Startup Growth, Share of Scaleups and High-Growth Company Density.
Growth entrepreneurship data for the 40 largest U.S. metropolitan areas was benchmarked against the national average. Cities with the most growth entrepreneurship activity spread widely around the United States, with entrepreneurship growing in certain pockets of virtually every region: the Midwest, the South and the East and West Coasts.
Most of the metros considered "usual suspects" for growth, including Austin, Boston, San Diego, San Francisco and San Jose, performed very well. But top performers also included Washington, D.C.; Nashville, Tennessee; Columbus, Ohio; and other metros not typically noted for entrepreneurship.
The top five ranked metros were Washington, D.C.; Austin, Texas; San Jose, California; Columbus, Ohio; and Nashville, Tennessee.
The Kauffman Index of Growth Entrepreneurship: State Trends
To facilitate comparison across peer groups of states, the Kauffman Index looked at the 25 largest and 25 smallest states by population. The larger states are overwhelmingly urban, while populations in smaller states tend to be more dispersed.
Virginia took first place in growth entrepreneurship activity among the 25 largest states, followed by Maryland, Arizona, Massachusetts and Texas. Kauffman researchers said it is no coincidence that two of the top states include the highly entrepreneurial Washington, D.C., metro area. Among larger states, 12 ranked higher than they did last year, four experienced no change in rankings and nine ranked lower.
The Kauffman Index of Growth Entrepreneurship: National Trends
The Kauffman Index of Growth Entrepreneurship is an early indicator of business growth in the United States, integrating several high-quality sources of timely information into one composite indicator of entrepreneurial business growth. The Index captures growth entrepreneurship in all industries, and is based on the universe of all U.S. employer businesses (approximately 5 million firms) and a privately collected benchmark of growth businesses. This allows us to measure business growth from both revenue and job creation perspectives. Moreover, we also present trends on business exits—more particularly initial public offerings, a business milestone commonly associated with innovative, high-growth companies.
This new report shows that U.S. entrepreneurial businesses are growing, and rose in the last year for the third year in a row. This year’s increase was driven by startups growing faster in their first five years than they were in previous years, and more young companies scaling up employment. The entrepreneurial activity increase in the 2016 Index represents the largest year-over-year increase in the past decade. Despite these promising markers, however, many U.S. growth indicators remain in a long-term decline.