Paris may be great for lovers, and Sydney is the current hot
spot for sports, but for entrepreneurs in search of the best cities
for their businesses, the names are locales like Fort Worth, Las
Vegas and West Palm Beach/Boca Raton, Florida. These cities were
among the top 10 large U.S. metropolitan areas in
Entrepreneur and Dun & Bradstreet's seventh annual
ranking of the best cities in the nation for entrepreneurship. They
won their laurels not because of their romantic milieus or skill at
lobbying the Olympic committee, but for their ability to inspire
business start-ups, encourage expansion of existing firms, attract
new jobs and limit the risk of failure.
In the Net age, when communications tentacles reach almost
everywhere, it might seem anachronistic to suggest any geographic
location is better than another. Yet the strong showings of these
top cities suggest there are such things as great cities, and these
fit the bill.
Obviously, to be a great entrepreneurial city, you have to have
a lot of entrepreneurs. We looked at the percentage of businesses
in each metropolitan statistical area (MSA) that were five years
old or younger. Las Vegas had the highest score of the 60 MSAs
studied, scoring 100 in this category, helping it grab the No. 7
overall ranking. But all the top 10 cities had scores in the upper
80s or better, with one exception: ninth-ranked New York City,
where apparently new businesses aren't being started much
faster than they are in the average city.
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Another measure of growth looked at how much employment expanded
from 1999 to 2000 in existing businesses that started the period
with fewer than 20 employees. Once again, Las Vegas had a very high
score of 99, matched only by New York among the top 10. Florida
cities tended to do poorly on this metric, with both No. 8 Orlando
and No. 2 West Palm Beach/Boca Raton ranking average or below
average.
Economic growth, a parameter based on the change in employment
among all businesses as reported by the U.S. Bureau of Labor
statistics over the three years ending January 1999, highlighted
Las Vegas yet again. The desert dynamo sported the best economic
growth rating in the nation, but was only one point ahead of
Orlando and 10th-ranked Austin/San Marcos, Texas.
The risk of bankruptcy was represented by a Dun & Bradstreet
cal-culation of the rate of business failures during 1999. The
higher the number, the safer the city for nascent firms. Here was
Las Vegas' downfall, as the city scored among the worst in the
nation, neutralizing its stellar rating on the other three
criteria. However, that's not necessarily bad, says Iris
Geisler, the Dun & Bradstreet economist who conducted the
study. In an otherwise economically robust community like Las
Vegas, higher bankruptcy rates are likely due to an adventurous
group of entrepreneurs willing to take risks and a financial
community willing to lend them the money to try novel ideas.
Mark Henricks is Entrepreneur's "Cutting
Edge" columnist.
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