Food And Drinks

Las Vegas, Orlando, Austin lead the US with the most startups

las-vegas-orlando-austin-lead-the-us-with-the-most-startups

Startups are a major engine of the US economy. Every year, thousands of entrepreneurs create new businesses that create jobs and promote innovation and efficiency in the marketplace. According to the US Census Bureau, more than 420,000 startups created 2.2 million new jobs in 2018.

Unfortunately, entrepreneurship in the US has been in decline for decades. In the late 1970s, the birth rate in the United States, defined as the number of new businesses in a given year divided by the total number of businesses, was nearly 14 percent. Four decades later, the rate was just over 8 percent.

One of the main factors contributing to this trend is firm focus. In the past few decades, many sectors have shown a trend towards consolidation and greater concentration in the market, making large companies even bigger and more successful through economies of scale, network effects and other benefits.

The economic downturn also tends to slow the creation of startups, and the impact of the Great Recession on new business creation has been particularly overwhelming over the past decade. In contrast to previous recessions, in which a decline in startup activities was followed by a growth phase, the start-up rate fell overall in the course of the Great Recession and has remained more or less unchanged at around 8 percent since then. Due to the long economic uncertainty resulting from a long, uncertain recovery, many potential entrepreneurs decided to minimize their risk and forego new business opportunities. This is especially true for many aspiring founders in their late 20s and 30s who graduated from a poor job market with high debt loads.

Over the past year, the COVID-19 pandemic has created even more economic difficulties, and the particular circumstances surrounding this downturn have created an even more complicated picture. In addition to the typical barriers to entrepreneurship created by a recession, different industries face different fates in the age of stagnation and social distancing. Certain sectors have become even more entrenched in daily life, creating new growth opportunities in areas such as e-commerce, video conferencing, online education and collaboration tools. On the other hand, COVID-19 is likely to further suppress startup activities in many sectors such as housing, food, and retail. In recent years, stagnating or declining initial formation rates have been recorded in these areas. The prospect of entering these industries is growing even greater today as consumers have health and safety concerns, drag demand, and increase overheads.

The creation of new startups is unevenly distributed across different regions and industries. Most of the states with the highest birth rate are in the western and southern US, led by Nevada (10.39 percent) and Florida (10.16 percent). Many of these states offer a combination of pro-business policies, low individual and corporate tax rates, relatively low operating costs, good educational facilities, and population growth that offers both a customer base and a job market.

Unsurprisingly, at the subway level, most of the leading hubs for startup startup are in the states with the highest startup activity. In many locations in the west and south, business start-ups and the associated growth in employment continue to be strong. To find out which metros are leading the way, Roofstock researchers calculated the lagging average start-up formation of five years – defined as the number of new businesses in a given year divided by the total number of businesses. The research team also analyzed the impact of startup activities on employment growth.

These are the metropolitan areas with the most startup activity.

Big metros with the highest startup activity

Photo credit: Alamy Stock Photo

15. St. Louis, MO-IL

Startup charter rate: 9.09% Annual start-up charter rate: 4,715 Annual new jobs created by startups: 19,078Jobs created by startups as a percentage of all new jobs: 12.22%

Photo credit: Alamy Stock Photo

14. San Diego-Chula Vista-Carlsbad, CA.

Startup Creation Rate: 9.28% Annual Startup Creation Rate: 5,599 Yearly New Jobs Created by Startups: 27,338Jobs Created by Startups as a Percentage of All New Jobs: 15.13%

Photo credit: Alamy Stock Photo

13. Riverside-San Bernardino-Ontario, CA.

Startup creation rate: 9.40% Annual startup creation rate: 4,867 Annual new jobs created by startups: 28,137Jobs created by startups as a percentage of all new jobs: 16.10%

Photo credit: Alamy Stock Photo

12. Tampa-St. Petersburg-Clearwater, FL

Incorporation rate: 9.47% Annual incorporation: 5,174 Annual new jobs created by startups: 25,792 Jobs created by startups as a percentage of all new jobs: 12.31%

Photo credit: Alamy Stock Photo

11. Los Angeles-Long Beach-Anaheim, CA.

Startup Creation Rate: 9.47% Annual Startup Creation Rate: 24,718 Yearly New Jobs Created by Startups: 144,716Jobs Created by Startups as a Percentage of All New Jobs: 18.05%

Photo credit: Alamy Stock Photo

10. Houston-The Woodlands-Sugar Land, TX

Startup Creation Rate: 9.48% Annual Startup Creation Rates: 9,214 Yearly New Jobs Created by Startups: 55,475Jobs Created by Startups as a Percentage of All New Jobs: 14.44%

Photo credit: Alamy Stock Photo

9. Jacksonville, FL

Incorporation rate: 9.50% Annual incorporation: 2,474 Annual new jobs created by startups: 11,796 Jobs created by startups as a percentage of all new jobs: 14.41%

Photo credit: Alamy Stock Photo

8. Atlanta-Sandy Springs-Alpharetta, GA

Incorporation rate: 9.52% Annual incorporation: 9,140 Annual new jobs created by startups: 48,582Jobs created by startups as a percentage of all new jobs: 14.14%

Photo credit: Alamy Stock Photo

7. Phoenix-Mesa-Chandler, AZ

Startup charter rate: 9.63% Annual start-up charter rate: 6,108 Annual new jobs created by startups: 37,785Jobs created by startups as a percentage of all new jobs: 14.02%

Photo credit: Alamy Stock Photo

6. Denver-Aurora-Lakewood, CO

Startup Creation Rate: 9.64% Annual Startup Creation Rate: 5,590 Yearly New Jobs Created by Startups: 28,485Jobs Created by Startups as a Percentage of All New Jobs: 14.69%

Photo credit: Alamy Stock Photo

5. Dallas-Fort Worth-Arlington, TX

Incorporation Rate: 9.82% Annual Incorporation: 10,731 Annual New Jobs Created by Startups: 69,696 Jobs Created by Startups as a Percentage of All New Jobs: 15.11%

Photo credit: Alamy Stock Photo

4. Miami-Fort Lauderdale-Pompano Beach, FL

Startup Creation Rate: 10.46% Annual Startup Creation Rate: 14,894 Annual New Jobs Created by Startups: 69,769Jobs Created by Startups as a Percentage of All New Jobs: 18.57%

Photo credit: Alamy Stock Photo

3. Austin-Round Rock-Georgetown, TX

Startup charter rate: 10.61% Annual start-up charter rate: 3,858 Annual new jobs created by startups: 21,357 Jobs created by startups as a percentage of all new jobs: 16.49%

Photo credit: Alamy Stock Photo

2. Orlando-Kissimmee-Sanford, FL

Startup creation rate: 10.95% Annual startup creation rate: 4,861 Annual new jobs created by startups: 25,533Jobs created by startups as a percentage of all new jobs: 16.68%

Photo credit: Alamy Stock Photo

1. Las Vegas-Henderson-Paradise, NV

Startup Creation Rate: 11.44% Annual Startup Creation Rates: 3,467 Yearly New Jobs Created by Startups: 21,074Jobs Created by Startups as a Percentage of All New Jobs: 17.82%

Detailed results and methodology

The data used in this analysis comes from the US Census Bureau’s 2018 Business Dynamics Statistics, which includes all US companies with paid employees. To identify locations with the most startups, the researchers calculated the trailing average five year start-up rate (2014-2018) – defined as the number of new companies in a given year divided by the total number of companies. The researchers also calculated the average annual number (and proportion) of new jobs created by startups between 2014 and 2018. In order to improve the relevance, only metropolitan areas with at least 100,000 inhabitants were included. In addition, metros were divided into cohorts based on population size: small (100,000–349,999), medium (350,000–999,999), and large (1,000,000 or more).

FOX28 Spokane ©

0 Comments
Share

Janet Smith