Amid a national microbusiness activity dip, Maryland and DC boast high marks

Despite a reputation for political and vehicular gridlock, DC and the areas ringing it — including the state just to the north — scored high marks when it came to something far more movable: microbusiness activity.

This assessment came from the latest Microbusiness Activity Index, a data project from GoDaddy’s Venture Forward initiative and the University of California, Los Angeles’ Anderson Forecast.

The web domain provider’s small business-focused project and the university’s economic forecasting entity periodically produce data and constituent reports about the activity of microbusinesses, which GoDaddy defines as businesses with fewer than 10 employees, “a discrete domain name and an active website.” The index offers composite, quarterly scores according to how well individual states, counties and cities perform in three categories:

• Infrastructure, or the physical and intellectual architecture available for accessing the internet
• Participation, or how many GoDaddy online businesses the jurisdiction produces
• Engagement, or how active the websites are in each relevant area

The latest report, which accounts for Q4 2022 data, awards DC’s metropolitan statistical area (MSA) a score of 110.5 — the third highest of any US metro region, following the West Coast tech hubs of San Francisco and San Jose. It scored this high despite a nationwide dip in microbusiness activity (102.9 to 102.7) since April 2022 which the report attributes to a mix of economic slowdown and increasing interest rates.

Judged as a state instead of an MSA, DC landed the highest state marks at 108.8. Maryland, whose southern suburbs feed into the DC metro area and fuel a major portion of the district’s workforce, scored fourth-highest with 105.5. Moreover, DC, Maryland and fellow surrounding state Virginia posted some of the United States’ lowest decline rates, with composite scores dropping less than 3.55 points between December 2021 and 2022.

Microbusiness Activity Index by state, December 2022. (Courtesy image)

Microbusiness Activity Index change by state, December 2021 to December 2022. (Courtesy image)

According to the index’s non-report county data, which it last updated in March 2023, DC’s high performance was underscored by three of the country’s five highest-performing counties and independent cities: Falls Church City (123.2) and Arlington County in Virginia (122.29), as well as Howard County (121.55) in Maryland.

The last of those three counties is sandwiched roughly halfway between DC and Baltimore, Maryland’s largest and only independent city, which the index put at 101.7 against a national county average of 99.8. The surrounding, non-overlapping Baltimore County scored 109.5.

Venture Forward Senior Director Alexandra Rosen told Technical.ly via email that DC and Maryland’s high performance reflects their relatively high educational attainment and internet access.

“In short, access to broadband and computers, educational attainment, and the presence, as well as growth in the number of microbusinesses, help these locations shine,” Rosen said. “Both Washington, D.C. and Maryland are strongly above the national average on the infrastructure subindex (including the availability of broadband and education) at 114 and 108, respectively (compared to the national 104). Both also rank above the national average for the number of microbusinesses and microbusiness owners — what we call the Participation subindex — with scores of 104 and 103 compared to a national average of close [to] 100.5.”

The report further justified the importance of tracking microbusiness activity at all by evoking a key economic indicator: job growth.

“After controlling many likely national and local causes of job growth, we find that every one additional online microbusiness owner is associated with an increase of 6.7 jobs based on panel county data in the U.S. from April 2020 to December 2022,” the report reads.

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