Small-Business Activity Climbing In Most U.S. Cities, States

Small-business activity is on the rise in 49 of the 50 U.S. states and in 38 of the 40 largest metropolitan areas this year, according to two new reports from the Kauffman Foundation.

The 2015 Kauffman Index: Main Street Entrepreneurship measures business activity along two distinct and complementary dimensions: the rate of business owners in the economy (the percentage of adults owning a business in a given month), and established small business density (the ratio of established small-employer businesses compared to population).

“Following a post-recession downward and stagnant trend in small-business activity, we’re now seeing Main Street Entrepreneurship begin to rise,” says E.J. Reedy, director of research and policy at the Kauffman Foundation. “This obviously is good news given that these small businesses make up 63 percent of all employer firms nationally.”

Josh Russell, senior research assistant in research and policy at the Kauffman Foundation, adds, “For the first time, state and local policymakers can now see where their regions stand in terms of small-business activity. This index provides a baseline for metro and state leaders to gauge the number and density of small businesses and the rate of ownership over time—including a first-ever look at trends by demographic groups.”

The top five metropolitan areas for small-business activity as measured by the index were New York; Boston and Providence, Rhode Island, which tied for second place; San Francisco; and Portland, Oregon. Nashville and Charlotte, North Carolina are the only two areas that saw a decline in small-business activity among the Top 40 U.S. metro areas in the 2015 Index when compared to 2014.

Tennessee is the only state that did not show an increase in established small-business activity in 2015 compared to 2014. Among the 25 largest states, the five states with the highest activity were Minnesota, Colorado, Massachusetts, New York and New Jersey. Among the 25 smallest states, the states with the highest activity were Vermont, Montana, North Dakota, South Dakota and Wyoming.

Click here for more of the Kaufman Foundation’s findings.

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