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Entrepreneurs / Investing / Startups

Philly regional entrepreneurship lagging, says annual Kauffman study

Just a quarter of new entrepreneurs here were approximately 95 percent confident in their future, compared to more than nine in ten in Atlanta.

How are you feeling?

The Philadelphia region is home to the fewest, least confident entrepreneurs of the country’s 15 largest metro areas, according to an annual report [PDF] on new business ventures from the Kauffman Foundation.

New business formation increased nationwide in 2008, mostly for the “lowest-income potential” startups, according to a press release from the Kansas City organization. The survey does not include only tech-related ventures, but all new launches.

National entrepreneurial activity has remained steady in each year of the 12-year-old study, despite the status of the economy, as Wall Street Journal blog Venture Capital Dispatch reported.

Entrepreneurial Activity for 15 largest U.S. Metro Areas in 2008

1. Atlanta: 0.74 percent*
2. Phoenix: 0.55
3. S. California: 0.52
4. Los Angeles: 0.51
5. Miami: 0.5
6. New York 0.45
7. Dallas: 0.42
8. San Francisco: 0.42
9. Houston: 0.34
10. D.C.: 0.30
11. Chicago: 0.29
12. Detroit: 0.25
13. Boston: 0.25
14. Seattle: 0.20
15. Philadelphia: 0.16

Source: Kauffman Index of
Entrepreneurial Activity
*Percent of individuals aged 20 to 64 who do not own a business in the first survey month that start a business in the following month with 15 or more hours worked weekly per 100,000 people

Despite some enthusiasm, Philadelphia venture capital funding has fallen drastically, following national trends. Our region’s entrepreneurial activity rate — that 0.16 percent of the adult, non-business owning population started a business per month in 2008 — was a fifth the size of Atlanta’s, which was the most active of the 15 largest regions (see table at right).

Confidence levels largely corresponded to the number of startups, so our region proved the least sure of the future — just a quarter of new entrepreneurs here were approximately 95 percent confident in their future, compared to more than nine in ten in Atlanta.

It wasn’t just Philly. While New Jersey showed a middling total, Pennsylvania ranked at the bottom for state activity — 0.14 percent, more than four times lower the 59 percent peak from Georgia.

Which some pointed as a sign of the troubling economy — more unemployed people with a chance to try a new venture — the entrepreneurial rate increased in all regions from 2007 to 2008, except in the Midwest, where it declined slightly to 0.23 percent from 0.25 percent.

Nationally the survey noted an increase in startup activity from immigrants, Hispanics, Asian Americans and the oldest age group surveyed, those between 55 and 64, as the press release stated.

Does the survey mean something to you? Are we doing anything about it? What does Atlanta offer that we don’t?

Hat Tip Philly Tech News.

Companies: Kauffman Foundation

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