According to a recently released report by the Kauffman Foundation, Arizona has become one of the nation’s hubs of entrepreneurial activity, and is one of the top five large states for starting a business.
The foundation’s Kauffman Index of Startup Activity ranks Arizona number 4 of the 25 largest states compared to number 6 last year.
The annual rankings come from crunching the numbers from numerous entrepreneurial studies and focusing on “the actual results of entrepreneurial activity – such as new companies, business density, and growth rates,” the study states.
The northern region of our state has certainly contributed to Arizona’s overall success. We offer a slew of resources, such as the Northern Arizona Center for Entrepreneurship and Technology, to support startups. Programs and initiatives from the City of Flagstaff, Coconino County and the Greater Flagstaff Chamber of Commerce also are responsible for encouraging savvy individuals in our region to take a chance on their ideas and begin their own businesses.
The Kauffman report measures factors such as the rate of entrepreneurs in the economy, which they define as the percentage of adults who become entrepreneurs in any given month. In Arizona that figure is .40 percent, meaning 400 people out of 100,000 in Arizona become entrepreneurs each month.
One of the more interesting factors measured in the report is the “Opportunity Share” of new entrepreneurs. Basically, it measures how many new entrepreneurs were already working somewhere else when they made the leap to entrepreneurship versus how many were unemployed at the time.
According to the report, the measurement “acts as a broad proxy for business growth prospects.” The logic? An entrepreneur who was unemployed might be starting their business out of necessity and have a lower growth potential than someone who jumped in because they recognized a market opportunity.
The report states Arizona has an “opportunity share” of almost 83 percent, meaning only 17 out of every 100 new entrepreneurs were unemployed when they started their businesses.
Having national recognition of our growing, vibrant entrepreneurial hub is important for Arizona. Like attracts like, and having a reputation for valuing entrepreneurship will draw more talented individuals to our region, and thus increase the opportunity for economic vitality here.