Useful Stats: State Business Churn Data & Ranking, 2004-2009

Using data from the Small Business Administration's Office of Advocacy, SSTI has prepared a table showing how each state (and the District of Columbia) has ranked in business churning from 2004 to 2009. Business churning is a measure of the creation of new companies and the death of existing companies as share of total firms. Churning increases as the number of new start-ups and existing business failures per year increase. A high level of business churning can be linked to the presence of innovation and growth in a state, since it may indicate the presence of entrepreneurial activity and the transition to new industries.

Over this period, Arizona, Florida, Georgia, Nevada and Utah have consistently been among the top performers. Connecticut, Iowa, Louisiana, Nebraska and Wisconsin, on the other hand, have continued to occupy the bottom tier.

Alaska showed the most improvement rising from 36th in 2004 to 6th in 2009. Other states that saw relative improvements include Maine, Michigan and Ohio. Washington, however, saw a drastic drop from 2nd to 47th over the same period. Tennessee and Maryland also saw significant drops in the rankings. A slight methodological change in data collection that occurred between the 2007 and 2008 reports might be attributable to the drastic change in rankings for some states.

SSTI's table is available here.

Additional SSTI tables showing state business churning statistics are available for 1998-2001 and 2002-2003.