The 10 Most Entrepreneurial States

The United States has long been considered a global leader in innovation and entrepreneurship. Founded on the principles of equal opportunity through hard work and achievement, America can attribute much of its economic success to its entrepreneurial spirit. To this day, new business growth plays a vital role in the U.S. economy. In the second quarter of 2017, for example, job gains from new business establishments were responsible for more than 18% of new job creation.

Nationwide, the number of new business establishments formed in a given year is well correlated with the ups and downs of the broader economy. After a steep decline during the Great Recession, the number of new business births has been on a steady rise. However, there are large differences at the state level as a result of local tax policies, regulations, access to capital, and small business incentives among other factors.

To see which states are fostering the most new business growth, Branch Publishing analyzed the most recent BLS Business Employment Dynamics report. The following states boast the most new business establishments and employment growth from those new businesses between 2016 and 2017.

Methodology

Data is from the Bureau of Labor Statistics’ Business Employment Dynamics report and covers Q3 2016 through Q2 2017, the latest release available. Using this data, Branch Publishing calculated Jobs Added from New Businesses as a percentage of total by dividing the total employment growth from private sector establishment births by the total employment at the beginning of the period. Number of New Businesses as a percentage of total was calculated by dividing the total private sector establishment births by the total establishments at the beginning of the period. States were then ranked by each metric and the resulting ranks were averaged to create the final list. “Establishments” are defined as locations with an active payroll.


Photo Credit: Wikimedia

10. Texas

Jobs Added from New Businesses (% of total): 2.97% (15th)
Jobs Added from New Businesses: 296,043
Number of New Businesses (% of total): 12.83% (11th)
Number of New Businesses: 71,437


Photo Credit: Wikimedia

9. Arizona

Jobs Added from New Businesses (% of total): 2.99% (14th)
Jobs Added from New Businesses: 68,310
Number of New Businesses (% of total): 14.25% (7th)
Number of New Businesses: 17,561


Photo Credit: Wikimedia

8. Colorado

Jobs Added from New Businesses (% of total): 3.16% (8th)
Jobs Added from New Businesses: 68,476
Number of New Businesses (% of total): 14.12% (8th)
Number of New Businesses: 22,382


Photo Credit: Wikimedia

7. Georgia

Jobs Added from New Businesses (% of total): 3.53% (5th)
Jobs Added from New Businesses: 128,443
Number of New Businesses (% of total): 13.87% (10th)
Number of New Businesses: 30,292


Photo Credit: Wikimedia

6. Utah

Jobs Added from New Businesses (% of total): 3.15% (9th)
Jobs Added from New Businesses: 36,848
Number of New Businesses (% of total): 14.61% (5th)
Number of New Businesses: 11,607


Photo Credit: Wikimedia

5. Nevada

Jobs Added from New Businesses (% of total): 3.10% (10th)
Jobs Added from New Businesses: 35,116
Number of New Businesses (% of total): 14.80% (4th)
Number of New Businesses: 9,785


Photo Credit: Wikimedia

4. California

Jobs Added from New Businesses (% of total): 3.54% (3rd)
Jobs Added from New Businesses: 508,636
Number of New Businesses (% of total): 14.57% (6th)
Number of New Businesses: 176,990


Photo Credit: Wikimedia

3. District of Columbia

Jobs Added from New Businesses (% of total): 3.41% (7th)
Jobs Added from New Businesses: 17,521
Number of New Businesses (% of total): 17.32% (1st)
Number of New Businesses: 4,052


Photo Credit: Wikimedia

2. Idaho

Jobs Added from New Businesses (% of total): 3.54% (4th)
Jobs Added from New Businesses: 20,172
Number of New Businesses (% of total): 15.37% (2nd)
Number of New Businesses: 7,036


Photo Credit: Wikimedia

1. Florida

Jobs Added from New Businesses (% of total): 4.16% (1st)
Jobs Added from New Businesses: 303,459
Number of New Businesses (% of total): 14.83% (3rd)
Number of New Businesses: 79,706