Entrepreneurship IS disproportionately concentrated in the western and southern regions of the United States. Consider a few facts:
What about the Northeast? After all, Greater Boston is a leader in new software companies, the Philadelphia region in biotech, and New York City in media-related start-ups.
Statistically speaking, however, Boston and the others are mere eddies on a flowing tide. The population of the United States has been steadily moving south and west for decades. Business often leads the migration -- think of all the companies that once left New England for South Carolina, or Michigan for Texas. But business also follows a migration, in the sense that new companies spring up wherever there are customers for a company's wares and employees for its payroll.
Aside from population growth, what contributes to high new-business-formation rates? One big factor: what Acs and Armington call "industry intensity," which is essentially a measure of how many businesses (compared with population) already exist in a given area. The more business-intense an area, the friendlier it is to start-ups. The unemployment rate in a region does not make a difference, say the two Census researchers, but education levels do. "People in regions that have a high percentage of college graduates are much more likely to start businesses than those in regions with high concentrations of less skilled workers," their study says.
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