Iowa Ranks Low for Startups

Date: January 05, 2016

State is 42nd out of 50.

Entrepreneurial culture isn’t limited to Silicon Valley. Thanks to technology, startups can thrive at virtually any zip code. That said, the level of startup activity varies widely by state.

According to the 2015 Kauffman Index: Startup Activity report, Iowa ranks 42nd out of 50 states for startup activity. That’s down two spots from last year.

The state’s startup activity rank was based on three factors:

  • Rate of entrepreneurs (percentage of population in an area that became entrepreneurs in a given month): 0.18 percent

  • Percentage of new entrepreneurs who weren’t unemployed when they started the business: 87 percent

  • Startup density (number of startups per 100,000 residents): 111

Minnesota ranked 47th in the index, but several of Iowa’s other neighbors fared much better:

  • Nebraska: 20th (up from 23rd last year)

  • Illinois: 26th (up from 35th)

  • Missouri: 27th (down from 18th)

“For the first time, state and local policymakers can now see where their regions stand in terms of small business activity,” said Josh Russell, senior research assistant in research and policy at the Kauffman Foundation, in a statement. “This index provides a baseline for metro and state leaders to gauge the number and density of small businesses and the rate of ownership over time.”

Another report, the 2015 Kauffman Index: Main Street Entrepreneurship, looked at established small business activity and business owners. In that study, Iowa ranked 10th out of the smallest 25 states in the country, the same as the previous year.

Related Content: Small Business News | Economy | Iowa | Location

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