Kauffman Foundation: 2018 State Report On Early-Stage Entrepreneurship

Summary of Study

Bottom Line: The overall Kauffman Early-Stage Entrepreneurship (KESE) Index—a composite of four entrepreneurship indicators—ranged from -3.80 in Rhode Island to 2.78 in California, with a median of 0.17. The national figure in 2018 was 0.56, which was a slight decline from 2017 but still high by historical standards.  The KESE is a factor of the rate of new entrepreneurs, opportunity share of employment, startup early job creation, and startup early survival rate.

The purpose of these indicators is to provide a picture of early-stage entrepreneurial activity across the country. The indicators track changes in entrepreneurial activity over time, across geographies, and among various demographic groups.

Aside from the overall KESE Index, the subcomponents showed wide entrepreneurship differences among the states:

  • The rate of new entrepreneurs ranged from a low of 0.12 percent in Rhode Island to 0.46 percent in Florida. The median rate of new entrepreneurs was 0.29 percent. 

         — Nationally, the rate of new entrepreneurs in 2018 was 0.32 percent, which reflects that 320 out of every 100,000 adults became new entrepreneurs in a given month, a slight decrease from 2017. 

  • The opportunity share of new entrepreneurs estimates the percentage of those new entrepreneurs who created their businesses out of opportunity instead of necessity. This indicator ranged from a low of 68.43 percent in Wisconsin to 94.05 percent in South Dakota, with a median of 85.68 percent. 

         — The national opportunity share of new entrepreneurs in 2017 was 86.16 percent, an increase from 2017. 

  • Startup early job creation captures job creation, measured as the total number of jobs created by startups per capita. This indicator ranged from 3.06 jobs per 1,000 people in West Virginia to 11.32 per 1,000 people in the District of Columbia, with a median of 4.68. 

         — The national startup early job creation in 2017 was 5.20 jobs per 1,000 people, about the same as 2017. 

  • Startup early survival rate reflects the one-year survival rate for new firms. It ranged from 70.94 percent in Missouri to 81.97 percent in Mississippi, with a median of 79.4 percent.

         — Nationally, the startup early survival rate was 79.43 percent, about the same as 2017.

Read the full study HERE

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Kauffman Early-Stage Entrepreneurship (KESE) Index by State (2018)

Kauffman Foundation

Findings:

  • The overall Kauffman Early-Stage Entrepreneurship (KESE) 2018 Index—a composite of four entrepreneurship indicators—ranged from -3.80 in Rhode Island to 2.78 in California, with a median of 0.17. The national figure of 0.56, which was a slight decline from 2017 but still high by historical standards. 

  • The rate of new entrepreneurs ranged from a low of 0.12 percent in Rhode Island to 0.46 percent in Florida.

  • The opportunity share of new entrepreneurs ranged from a low of 68.43 percent in Wisconsin to 94.05 percent in South Dakota.

  • The startup early job creation indicator ranged from 3.06 jobs per 1,000 people in West Virginia to 11.32 per 1,000 people in the District of Columbia.

  • The startup survival rate ranged from 70.94 percent in Missouri to 81.97 percent in Mississippi. 

Read the full study HERE