The paper, "Beyond Metropolitan Startup Rates: Regional Factors Associated with Startup Growth," reports on entrepreneurship activity in 356 U.S. metros as examined from three angles: the startup rate for all industries, the startup rate for high-tech sectors and the rate for high-growth firms.
Contrary to the conclusions of most earlier studies, this regionally focused analysis found that the public sector can affect few significant factors to encourage entrepreneurship. For example, despite billions of dollars in government research expenditures, which widely are believed to trickle down to the private sector, area research universities and patents do not contribute to higher rates of entrepreneurship.
Education appears to be the most significant factor that the public sector may affect. Metropolitan areas with more college graduates will produce more startups; however, while college completion often is considered the minimum indicator of high skill, the study showed that a higher high school completion rate will further increase the area's startup rate.
Thus, it appears that policymakers best can influence entrepreneurship by finding ways to effectively connect these two factors.
Further, the study revealed that:
This first-ever compilation of metro-level data provides a basis for more rigorous research about regional factors and how they affect startups and entrepreneurial cultures.