You'll Never Guess the Cities Where Startups Are Growing Fastest Today
After a slump amid the Great Recession, more and more startups are emerging and entrepreneurship has been on the rise since 2011. From creating jobs to boosting the economy, with this rise comes a number of benefits. People often associate entrepreneurs and startups with Silicon Valley, if not New York City or Boston, because a disproportionate share of venture capital investments flow to startups based in those cities. However, other metropolitan areas have been experiencing some under-the-radar growth.
Over the past year, 26 metropolitan areas across the country experienced a boost in growing startups, and the areas that saw the most substantial growth were Atlanta, Indianapolis and Portland, according to the Kauffman Foundation's recently released its 2017 Index of Growth Entrepreneurship. The findings reveal not only how entrepreneurship is growing across the U.S., but where.
To rank the cities, the researchers took three factors into account: startup growth rate, share of scaleups and high-growth company density. Both startup growth rate and share of scaleups are employment-based measurements, and share of scaleups refers to companies that grew to 50 employees or more in less than 10 years of operation. High-growth company density, which is the only revenue-based measure of the study, looks at the proportion of "high-growth" companies -- private companies that have at least $2 million in revenue and a minimum 20 percent growth over a three-year period -- in a certain area.
So, wonder which cities have been bustling in the startup scene? Look no further. Here are the top 10 cities with the most entrepreneurial activity, according to this year's Kauffman Index of Growth Entrepreneurship.
Moving up a slot from last year, Columbus, Ohio, takes the bronze for the most entrepreneurial activity, according to the index. That's largely because startups grow an average of 96 percent in their first five years, in terms of employment. While it's not a usual suspect when it comes to the startup scene, Columbus has the highest share of scaleups of any city, at 2.5 percent. That means that around 25 out of every 1,000 Columbus firms founded in the past 10 years have scaled to at least 50 or more employees since they launched.
San Jose, Calif.
San Francisco, Calif.
Basically the Silicon Valley of the East Coast, Boston has also long been recognized as a very entrepreneurial city. That's why it's no surprise that it made the cut for this year's top 10. Although it's moved down two spots since 2016, Boston ranks fourth in terms of cities with the highest density of venture capital-backed business exits. Major companies that got their start in the city of Boston include Liberty Mutual, Marshalls, Samuel Adams and Timberland, to name a few.
Related: Need a Business Idea? Here are 55