2019 Early-Stage Entrepreneurship in the United States: State Report

Bottom line:  In the 2019 Kauffman Early-Stage Entrepreneurship (KESE) state-level index, which aggregates four entrepreneurship metrics, California ranked as the most entrepreneurial state with a score of 5.04, and Connecticut ranked the least entrepreneurial with a score of -7.57. Other highly entrepreneurial states, according to the KESE index, are Florida, with a score of 4.98, and Wyoming, 4.02.  Other less entrepreneurial states include Ohio, with a score of -3.42, and Ohio, -2.56. 

The KESE Index is a summary of the following four entrepreneurship indicators: 1) Rate of new entrepreneurs 2) Opportunity share of new entrepreneurs 3) Startup early job creation 4) Startup early survival rate

State Trends in the Rate of New Entrepreneurs
At the state level, the rate of new entrepreneurs ranged from 0.17 percent in Rhode Island to 0.47 percent in Florida. The median rate of new entrepreneurs was 0.30 percent. Nationally, the rate of new entrepreneurs in 2019 was 0.31 percent, which reflects that 310 out of every 100,000 adults became new entrepreneurs in a given month. Other states with a high rate of new entrepreneurs include Alaska (0.44 percent), California (0.42 percent), Georgia (0.41 percent), and Texas (0.41 percent). States with a relatively low rate of new entrepreneurs include West Virginia (0.18 percent), Minnesota (0.18 percent), and Connecticut (0.19 percent). 

State Trends in the Opportunity Share of New Entrepreneurs
Across states, the opportunity share of new entrepreneurs ranged from 71.4 percent in the District of Columbia to 96.2 percent in South Dakota, with a median of 85.6 percent. Over the last 22 years, South Dakota has generally had an opportunity share higher than the median state.

State Trends in Startup Early Job Creation
Across states, the startup early job creation ranged from 9.4 jobs per 1,000 people in the District of Columbia to 3.2 jobs per 1,000 people in South Dakota. Median startup early job creation declined from 6.79 in 1996 to a low of 4.04 in 2010, but it has since increased to the current figure of 4.69. Since 1996, the District of Columbia (highest in 2019) has consistently had more startup jobs created per 1,000 residents than the median state.

State Trends in Startup Early Survival Rate
The startup early survival rate ranged from 69.4 percent in Connecticut to 90.5 percent in Virginia, with a median of 79.4 percent in 2019. Other states with relatively high early survival rates include Massachusetts (84.0 percent) and Alaska (81.8 percent). Other states with relatively low early survival rates include Georgia (75.6 percent) and Missouri (75.3 percent).

Read the full study HERE.