When you think startups and entrepreneurship you naturally think Silicon Valley and New York City. Well, the Kauffman Foundation just published their up to date, Main Street Index. This is the real deal when it comes to starting up in the U.S.
While San Francisco is always thought of as startup city, this year both San Francisco and neighboring San Jose, slipped again. It seems in both areas, more and more people are going to work for startups, rather than starting up themselves. We’ve seen over the last five years, that cost of living is a major factor in the Bay Area, when it comes to starting a new venture. San Francisco saw their rate of new entrepreneurs decline from .46 in 2016 to .37 now. San Jose slipped from .31 to .25, reports Inc.com.
“In San Francisco and San Jose, there are simply less people trying their hands at entrepreneurship–going full time on their businesses,” Arnobio Morelix, a senior research analyst from the Kauffman Foundation, told Inc.com
New York on the other hand, has a dynamic, and large startup scene. But, being the hub for most major business in the US, their startup activity is often drowned out by the thousands of established businesses in the biggest city in the US.
Overall, startup activity across the country continues to increase, a trend noted for the last three years. However, it’s still not to the level that it was at in the 1980s.
A three-year upward trend in new business formation is a promising sign for the economy,” said Victor Hwang, vice president of Entrepreneurship at the Kauffman Foundation. “Recent research demonstrates that more startups lead to higher productivity, wage growth and quality of life. Growing startups not only support individual entrepreneurs but lift surrounding communities. We need to identify and remove barriers and contribute to a new model of economic development that infuses more entrepreneurship into the economy.”
This year, Miami is at the top of the heap. Followed by; Austin, Los Angeles, San Diego, and Las Vegas. Miami ranked number two last year. The Miami startup ecosystem is thriving, partly because of the Knight Foundation’s interest. The Foundation has invested $25 million dollars in 200 startups in the region. They’ve also backed Endeavor Miami, an organization that aims to help high impact businesses scale.
Austin has consistently ranked top 3 in the Kauffman Index.
Technet, a relatively new organization recognizing startup activity, ranked Miami number 24 in rising startup cities, Austin, San Diego and Las Vegas didn’t rank on their list, further discrediting that study.
Check out all the data from the Kauffman Foundation here.