The Seattle-Tacoma-Bellevue area ranked second-lowest last year among the nation's 15 largest metropolitan areas in new entrepreneurial activity, a new survey shows.
The study by the Kansas City, Mo.-based Kauffman Foundation ranked Los Angeles and Atlanta at the top of the list for entrepreneurial upstarts and Philadelphia and the Seattle-Tacoma-Bellevue area at the bottom.
The news that the Puget Sound area’s biggest metropolitan area isn’t generating new startup businesses as quickly as other cities isn’t necessarily as bad an indicator of economic health as it first appears.
Areas that are generating the most new businesses share these attributes: high jobless rates and low hiring levels by established businesses.
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The Kauffman study notes that while the level of business startups is at a new high level, most of those startups are one-person enterprises that don’t hire others.
The report says just 0.10 percent of adult Americans created firms that employed other workers in an average month in 2010 compared with 0.13 percent in 2007.
“Far too many founders are choosing jobless entrepreneurship, preferring to remain self-employed or to avoid the economic responsibility of hiring employees,” said Carl Schramm, president of the Kauffman Foundation. “This trend, if it continues, could have both short- and long-term impacts on economic growth and job creation.”
On a state level, Nevada and Georgia had the highest entrepreneurial activity last year while West Virginia and Pennsylvania had the lowest. Washington was 44th among the 50 states and the District of Columbia.
By demographic groups, Latinos saw the biggest rise in entrepreneurship, the study said. Rates of business launches were greatest among 35-to-44-year-olds.
John Gillie: 253-597-8663 email@example.com