Study Ranks Austin Metro Area #1 In The U.S. For Startups


Austin has long been a place where creative types and business whizzes have come to put their unique products to market. Now, there’s a study saying we’re the nation’s biggest hotbed of entrepreneurs.

According to a report recently released by the Ewing Marion Kauffman Foundation, the Austin-Round Rock-San Marcos area ranks #1 for startup activity. Our area ranked #2 in 2014.

“The Kauffman Index: Startup Activity provides a broad index measure of business startup activity in the United States. It is an equally weighted index of three normalized measures of startup activity,” the Foundation says in the 2015 report. First, they look at the number of new entrepreneurs in the local economy as a percentage of the area’s population. We know Austin has a ton of local businesses, but this factor in the index identifies newbies to the Austin business scene.

Second, the Foundation gauges the proportion of new entrepreneurs who chose entrepreneurship versus were forced into it. Simplistically speaking, was an entrepreneur employed before embarking on his or her own? Those who choose entrepreneurship tend to start businesses with more growth potential than those who become entrepreneurs out of necessity.

The third component of this index is startup density expressed as the portion of new employer businesses normalized by population. Companies contributing to this part of the index have employees and are therefore likely more mature businesses than one-person outfits.

The Kauffman Foundation measured the 40 largest metro areas in the US. Here are how the top 10 shook out:

  1. Austin-Round Rock-San Marcos, TX
  2. Miami-Fort Lauderdale-Pompano Beach, FL
  3. San Jose-Sunnyvale-Santa Clara, CA
  4. Los Angeles-Long Beach-Santa Ana, CA
  5. Denver-Aurora-Broomfield, CO
  6. San Francisco-Oakland-Fremont, CA
  7. New York-Northern New Jersey-Long Island, NY-NJ-PA
  8. Houston-Sugar Land-Baytown, TX
  9. San Diego-Carlsbad-San Marcos, CA
  10. San Antonio-New Braunfels, TX

Photo: Andrew Nourse, creative commons licensed.