Although most Americans might think that San Francisco is the hub of job creation from startups, 2014 data from the United States Census Bureau shows otherwise. Rather, the epicenter of job creation from startups in the U.S. is in the heart of Midland, Texas.
The map above illustrates the percentage basis of job creation from startups around the country. The larger the circle, the greater the percentage of jobs from startups. In addition, the legend identifies the percentage of startup jobs by the color of the circle; the darker the color, the higher the percentage. As can be seen, San Francisco lags with only 2.2% in jobs from startups. This was only slightly higher than the U.S. metro average of 2.1%.
The Top 10
- Midland leads the country in percentage of jobs from startups as a percentage of nonfarm private payroll jobsat 4.7%.
- Greenville, North Carolina was second in startup job creation in 2014 with 4.5%.
- Maderra-Chowchilla, California came in third at 4.5%.
- The Panama City – Lynn Haven – Panama City Beach, Florida metro area was fourth with 4.3%.
- Another Florida metro area, Punta Gorda, was fifth with 4.1%,
- Followed by Santa Rosa – Petaluma, California in sixth at 4.0%.
- A second Texas metro area, Victoria, was in seventh with 4.0%.
- Followed by Greeley, Colorado at 3.9%.
- Provo – Orem, Utah at 3.9%.
- Medford, Oregon rounded out the top ten at 3.9%. .
The map shows that the areas with the highest percentages of job creation from startups are generally located the along the East Coast, Texas and the West Coast. Only Provo-Orem and Greeley were located outside of those geographical regions.
Definition of Startups
The Census Bureau defines startups as businesses that began operating in a particular year. There is no prior business activity associated with the startups. The Business Dynamic Statistics produced by the Census Bureau provide valuable information on business in the U.S. across a broad range of statistical categories. Although San Francisco is often associated with tech startups, that definition may include more established businesses that do not qualify as startups according to the fairly strict definition of the Census Bureau.
Economic Recovery Reflected in Startup Jobs Creation
The Census Bureau data further shows that 2.5 million jobs were created by startups in 2014. This represents around 2.1% of total private nonfarm jobs. While this is a strong number, it is below the 3% private nonfarm jobs that the country saw in 2006 when there were 3.5 million jobs from startups. Job creation from startups was hurt significantly by the Great Recession. Still, these stats have bounced back from then.
Metro Area Increases in Startup Jobs
Growth in startups occurred in 50.7% of metro areas in the U.S. in 2014, up from 40.7% of metro areas in 2013. This number also shows a strong bounceback from the Great Recession. In 2009, during the height of the economic downturn, only 3.6% of metro areas saw increases in jobs from startups.
However, the 2014 number is well below the 71.6% of metro areas that saw an increase in startups in 2005. The question is whether the the uptrend in startup job will continue in the next few years, or whether larger economic forces stifle startups.