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SBA Releases Regional Entrepreneurship Index
Glenwood Springs, Colo., is the nation’s most entrepreneurial region, according to a study recently released by the U.S. Small Business Administration's Office of Advocacy and the Edward Lowe Foundation. The region's ranking is based on the Regional Entrepreneurship Index, a measure intended to standardize assessment of entrepreneurship within and across regions.
The study, The Innovation-Entrepreneurship NEXUS, attempts to show that innovation without entrepreneurship yields minimal economic impact. The authors note, “Whether they are building new firms or reinventing existing ones, entrepreneurs, through the application of new ideas to products and services, capture locally the economic benefits of innovation.”
The Regional Entrepreneurship Index used by the study ranks a total of 394 regions according to their entrepreneurial and innovation activities. The study finds the more entrepreneurial regions were associated with higher levels of technology than the less entrepreneurial ones. The leading regions expended nearly 54 percent more on R&D and recorded 67 percent more patents per labor force participant.
Glenwood Springs, Provo, Utah, and Springfield, Mass., respectively, topped all regions in the index's three entrepreneurship categories -- number of new firms per 1,000 labor force participants, percent of rapidly-growing firms, and average annual change in the number of new firms. Innovation measures such as R&D expenditures, number of patents, and high tech's share of the local economy also are considered by the index.
The index draws data from the U.S. Census Bureau's Statistics of U.S. Business Data program, the National Science Foundation's Survey of R&D Expenditures, U.S. Patent and Trademark Office, U.S. Bureau of Economic Analysis, and econometric models. Regions scoring high are said to be the most active in creating new firms, supporting the growth of those firms, and building a strong base of support for entrepreneurs.
The Innovation-Entrepreneurship NEXUS, which includes the complete list of cities and their rank on the Regional Entrepreneurship Index, is available for download at: http://www.sba.gov/advo/research/rs256tot.pdf