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Bottom Dwellers: Philadelphia, State Each Rank Last In Entrepreneurial Index
By JOHN P. CONNOLLY, The Bulletin
An annual index of entrepreneurial activity for 2008 shows that Philadelphia and Pennsylvania are at the bottom of the charts when it comes to new businesses.
The Kauffman Index of Entrepreneurial Activity, which has measured the rates and trends of business creation each year since 1996, found recently that Pennsylvania had the lowest amount of entrepreneurial activity of all the states in 2008. The study showed that .14 percent of Pennsylvania’s population, or 140 out of 100,000 adults, opened businesses each month.
Philadelphia was similarly underwhelming when it came to entrepreneurial growth, with .16 percent, or 160 out of 100,000 adults, opening a new business each month.
The statistics show Philadelphia musters only half of the national average of new business openings. In 2008, an average of 320 out of every 100,000 adults opened a new business each month across the country. States with the highest activity rates were Georgia, at .59 percent, New Mexico, .58 percent, and Montana with .53 percent.
Unlike other studies, the Kauffman Index compiles data from all adults age 20 to 64 when they first create businesses. The statistics include those businesses that are both incorporated and unincorporated. The index measures the percent of the non-business-owner population in a given month, then measures which of those owns a business the next month. Overall, the rate of entrepreneurship held steady through 2008.
“The overall pace of entrepreneurial activity did not suffer during the recession in 2008, which is great news. This is consistent with historical patterns, to the extent we understand them, which indicate that entrepreneurial activity is largely insensitive to the economic cycle,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “So far, at least through 2008, this pattern is holding up."
All regions except the Midwest saw an increase in entrepreneurial activity from 2007 to 2008. While the Northeast enjoyed an increase from 0.26 percent to 0.29 percent on the index between the two years, things were not quite so promising for Pennsylvania specifically. Between 2007 and 2008, Pennsylvania’s index dropped from 0.15 percent to 0.14 percent, the lowest number of all the states in the union. When the index started in 1996, Pennsylvania held a 0.17 percent index, tied with Rhode Island with the lowest score in the U.S.
John P. Connolly can be reached at jconnolly@thebulletin.us
The Kauffman Index of Entrepreneurial Activity, which has measured the rates and trends of business creation each year since 1996, found recently that Pennsylvania had the lowest amount of entrepreneurial activity of all the states in 2008. The study showed that .14 percent of Pennsylvania’s population, or 140 out of 100,000 adults, opened businesses each month.
Philadelphia was similarly underwhelming when it came to entrepreneurial growth, with .16 percent, or 160 out of 100,000 adults, opening a new business each month.
The statistics show Philadelphia musters only half of the national average of new business openings. In 2008, an average of 320 out of every 100,000 adults opened a new business each month across the country. States with the highest activity rates were Georgia, at .59 percent, New Mexico, .58 percent, and Montana with .53 percent.
Unlike other studies, the Kauffman Index compiles data from all adults age 20 to 64 when they first create businesses. The statistics include those businesses that are both incorporated and unincorporated. The index measures the percent of the non-business-owner population in a given month, then measures which of those owns a business the next month. Overall, the rate of entrepreneurship held steady through 2008.
“The overall pace of entrepreneurial activity did not suffer during the recession in 2008, which is great news. This is consistent with historical patterns, to the extent we understand them, which indicate that entrepreneurial activity is largely insensitive to the economic cycle,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “So far, at least through 2008, this pattern is holding up."
All regions except the Midwest saw an increase in entrepreneurial activity from 2007 to 2008. While the Northeast enjoyed an increase from 0.26 percent to 0.29 percent on the index between the two years, things were not quite so promising for Pennsylvania specifically. Between 2007 and 2008, Pennsylvania’s index dropped from 0.15 percent to 0.14 percent, the lowest number of all the states in the union. When the index started in 1996, Pennsylvania held a 0.17 percent index, tied with Rhode Island with the lowest score in the U.S.
John P. Connolly can be reached at jconnolly@thebulletin.us
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