Why entrepreneurship is booming in the US Southeast

Lindsey Cox can’t help herself: She’s going to use an agriculture metaphor.

The economies of the US Southeast have matured beyond produce and livestock. But the Tennessee native likes how effectively ag represents how entrepreneurial communities grow.

“You don’t start with corn; you start with seeds and gardening,” said Cox, CEO of public-private nonprofit Launch Tennessee. “We’ve all been doing that seed and gardening work over the last 10, 15 years, and I think we’re really starting to see the fruits of that. It’s great to see the harvest coming.”

Cox’s folksy metaphor fits the lingo of an emerging part of regional economic development. Most city and state governments still employ teams to attract corporate office relocations and support new manufacturing and distribution facilities. With its origins in the 1950s, so-called site selection strategies rely on existing businesses. In an era of accelerating returns, tiny startups can grow very big very fast. So regional leaders nationwide added new-look business and talent attraction efforts. 

People in this work increasingly call themselves “ecosystem builders” — more than 2,000 use the title on Linkedin. The “ecosystem” concept got its start with a business metaphor in the 1990s and was supercharged as a new priority after the Great Recession. The software-dominated cheap-money era of the 2010s secured entrepreneurship and tech-workforce as a part of any modern economic development strategy.

No region is without these efforts, but different regions prioritize it for different reasons. In the US Southeast, the fast-growing Carolinas and Florida want their reputations to extend beyond tourism and retirees; Tennessee, Alabama and Louisiana want to shake old stereotypes. All are experiencing business — and tech workforce — booms. 

In 2023, Americans started 5.5 million businesses, well-above pre-pandemic levels, nearly 2 million of which are likely to hire employees, according to the Economic Innovation Group. The US Southeast, along with the Mountain West, saw the highest growth.

Many emerging Southeast tech and startup hubs have local specialties — mobility in Chattanooga, say, or cybersecurity in Tampa — but across the US Southeast, boosters distinguish themselves from the big old coastal stalwarts with favorable tax policies, distinguished culture and the occasional folksy metaphor. 

From ‘Southern hospitality’ to a flourishing entrepreneurial landscape

After a decade of programming and a nationwide pandemic pop in entrepreneurship, states like Tennessee say they’re ready for a bigger stage.

“We have regional entrepreneur center partners all across the state,” LaunchTN’s Cox said. “We’ve been leveraging each other to help companies get ahead, both regionally and within industry sectors that are valuable to the state.”

This week, from Sept. 9-11, Cox’s LaunchTennessee will host 3686, their signature conference in boomtown Nashville (the conference is named for that city’s longitude and latitude). Just about every regional economic development strategy now has at least one homegrown tech, startup or innovation-themed event that aims to both retain local residents and attract new ones.

This connectedness is echoed by leaders across the region. 

Kwamena Aidoo, co-founder of Corridor Ventures, sees the same collaborative spirit in New Orleans, where the business landscape is shaped by the city’s historic role in commerce.

“Southern hospitality is played out in the business world,” Aidoo said. “There’s a small but growing number of founders working to solve global problems that we feel locally, whether it’s in clean tech, biotech, or food and beverage.”

A boom during the pandemic, then pressure to keep up

The pandemic, disruptive as it was, also served as a catalyst for entrepreneurial activity in the Southeast. Before 2020, the U.S. had seen a decline in entrepreneurship despite the narrative of a startup boom. But the pandemic shook the system alive, leading to a significant revival in business formations, particularly in the Southeast.

“We’ve seen tremendous growth post-pandemic,” said Lakshmi Shenoy, CEO of Embarc Collective in Tampa. “People realized they could move back to their home state and still access capital from anywhere. The desire to start something and solve real problems has only grown stronger.”

Federal and state initiatives, such as the State Small Business Credit Initiative (SSBCI) program, have further spurred this growth. In Tennessee, Launch Tennessee is actively deploying SSBCI funds to support startups, with checks ranging from $25,000 to $3 million. This infusion of fresh capital is helping to sustain the entrepreneurial momentum.

Despite the successes, the Southeast still faces challenges, particularly in ensuring that the talent pipeline keeps pace with the region’s growth. While the region has seen an influx of new residents and entrepreneurs, there is still a need to develop homegrown talent.

A recent Technical.ly analysis of computer science graduates demonstrates that most still come from big coastal cities, though traditional higher-ed and alternative programs are growing anywhere there’s high-end talent demands.

Nashville’s Vanderbilt University has added new artificial intelligence-focused programs, Cox added. 

“Some of the ground game is really just reversing the narrative,” said Aidoo. “We’ve got the talent; now we need to make sure the jobs are here so that when these students graduate, they stay and build here.”

The Southeast’s entrepreneurial boom is far from over. As Cox, Shenoy, and Aidoo emphasized, the region’s combination of lifestyle, opportunity, and strategic groundwork has set the stage for continued growth.

“It’s both a moment you can grab and leverage, but also something that’s not going away,” Cox said. “The pandemic blew the doors off of it, and now we’re seeing the results of all that groundwork. The Southeast is ready for its harvest.”