The Bob Pritchard Column
This show is all about entrepreneurs and the latest entrepreneurship study has some great news for the U.S. economy: startup growth is healthier than it has been in years.
We know that small business employs the highest percentage of people and at a time of incredible and accelerating technological disruption, it is these startups that will drive the economy of the future.
Each year, the Kauffman Index study measures entrepreneurship growth in 40 cities nationwide. The study is focused on output rather than input, which means it's looking at factors like business density, new companies, and growth rates. The study also measures entrepreneurship at the national, state, and metropolitan level.
This year, entrepreneurship grew in 34 of the 40 metro areas measured, which is the largest increase in the last decade on a national scale. This means that more new companies are cropping up nationwide, and they're starting up everywhere, not just in the bigger cities. If the trend continues, entrepreneurship growth could soon be back to pre-recession levels.
The usual big players like San Francisco and Boston stayed relatively stable compared to 2015's ranking, but other mid-sized cities went through some changes in the past year. Cincinnati had the biggest jump in the ranking since last year — it moved up 19 spots from 35 to 16 — while entrepreneurship slowed in Pittsburgh, moving the city from 12 down to 27.
Some cities had amazing growth of over 80% such as Number 3 ranked San Jose with a rate of startup growth of 128.1%, Washington DC with a rate of startup growth of 116.9% ranked at number one, San Antonio ranked number nine with a rate of startup growth of 85.8% and Austin at number two with a rate of startup growth of 81.2%.
Of course usually the growth really blossoms when these startups go to IPO and San Francisco led with an amazing 16 IPO’s, followed closely by Boston with a fantastic 15 IPO’s, San Jose with 7 IPOs, San Diego with five IPOs and Washington DC with 4 IPOs.
Each of these cities is actively supporting entrepreneurs and the results are evident. Helping entrepreneurs and providing infrastructure should be close to the number one priority for cities to ensure their future.