BIG News

Report: KC Ranks 18th for Startup Activity

Among the country’s 40 largest metro areas, Kansas City is ranked 18th on the new Kauffman Index of Startup Activity.

The city climbed several spots in this year’s index. In 2015, it ranked 29th. Kansas City is behind Riverside, California, and ahead of Tampa.

Twenty-three of the 40 metros experienced increases in entrepreneurial activity, Kauffman found.

Kauffman also released its rankings of the 50 states. Missouri was No. 9 among the 25 largest states, up from 10th a year earlier. Kansas ranked 18th among the 25 smallest states. It dropped a spot from 2015. (Kauffman separates the states into two groups to give a fairer comparison.)

“The startup numbers for states and metro areas dovetail with the national Startup Activity Index report, which showed entrepreneurship recovering from the Great Recession slump,” said Arnobio Morelix, senior research analyst at the Kauffman Foundation. “While there is considerable variation from one locale to the next, the aggregate data bodes well for business startup activity around the country.”

Kansas City saw an increase in the rate of adults who started new businesses, and more of them were “opportunity entrepreneurs.” That is, they launched a new venture because they had an idea they wanted to pursue, not because they needed to create a job for themselves.

But the metro slipped a little in the index’s measure of “startup density.” There were 77.9 new startups per 1,000 businesses, compared to 80.3 in the previous year’s report. The study’s authors defined a startup as a business that was less than 1 year old and that employed at least one person besides the owner.

Missouri saw an impressive gain in its startup density. It had 88.3 startups per 1,000 firms, compared to 76.6 a year prior.

Kansas’ startup density was 62.7, down from 64.4. It also reported a sharp decline in opportunity entrepreneurship—from 90.12 percent to 81.25 percent.

The top five cities were Austin, Miami, Los Angeles, San Francisco and Las Vegas. Pittsburgh ranked 40th. St. Louis was 36th.

Texas, Florida and California had the greatest levels of entrepreneurial activity among the largest states, while Montana, Nevada and Wyoming led the smaller states.