Heartland Forward recently released a new report titled, “America’s Entrepreneurial States: Supporting Entrepreneurs to Help Drive the Economy,” which analyzes the entrepreneurial ecosystems of each state and places them within a new State Entrepreneurial Index. The report lays out recommendations to spur entrepreneurial growth, including funding entrepreneurial support organizations, improving access to high-speed internet, investing in higher education and teaching entrepreneurial thinking in K-12 schools. In addition to the report, Heartland Forward has designed an interactive calculator allowing users to see the expected shift in ranking based on changes to risk capital, internet access and educational attainment.
Read the full report here.
Heartland Forward is a nonpartisan, 501c3 organization whose mission is to improve economic performance in the center of the United States by advocating for fact-based solutions to foster job creation, knowledge-based and inclusive growth and improved health outcomes. Heartland Forward conducts independent, data-driven research and programs to facilitate action-oriented discussion and impactful policy recommendations.
“Our country was built on entrepreneurship, and it’s absolutely essential we support our local and small business owners as we aim toward economic recovery from the COVID-19 pandemic. However, currently many of our heartland states lag behind the coasts in creating environments that are conducive to entrepreneurship,” said Ross DeVol, president and CEO of Heartland Forward. “That’s why Heartland Forward prepared this report with recommendations of policy initiatives states can enact to spur entrepreneurship and position their local economies for diverse, equitable growth. With the right investment and approach, the heartland can be home to future generations of entrepreneurs as they fulfill their American dreams.”
On the State Entrepreneurial Index, California comes in first, followed by New York, Utah, New Jersey and Colorado. The top state in the heartland is Texas at 14th, followed by Illinois at 20th and Minnesota at 25th. Only these three heartland states made the top 25, and heartland states occupy 16 of the bottom 20 positions, demonstrating a clear need for change in policies at the state level to create environments conducive to entrepreneurship.
“Revolution’s Rise of the Rest invests in promising seed stage startups based outside of NY, SF, and Boston,” said Anna Mason, Managing Partner of Revolution’s Rise of the Rest Seed Fund. “We know there are great entrepreneurs in the Heartland, because we spend time there. But we also recognize that there are challenges for startups seeking to scale outside the coastal tech hubs. Policy is key to overcoming those barriers. And the most important step in developing sound policy frameworks for innovation is to bring everyone to the table—policymakers, founders, startup champions, investors, and university leaders—to discuss what helps and hinders startup growth in the community. From that shared understanding, real dialogues and possibility can emerge.”
“Lawmakers are typically focused on large corporations or small mom and pops, but high growth companies — young firms, are technically neither one nor the other. Rather, they are hopefully on their way to becoming the next Fortune 500,” said Bobby Franklin, president and CEO of the National Venture Capital Association and heartland native. “Our job at the National Venture Capital Association is to help policymakers understand the entrepreneurial ecosystem. As shared in Heartland Forward’s report, this pipeline of companies is very important to our economy as they drive innovation that brings services and technology to market, and undoubtedly, the heartland needs more support in making this happen for entrepreneurs and the region they call home.”
The State Entrepreneurial Index utilizes a measure of entrepreneurship that combines the percent of total private sector employment with the percent of employees with bachelor’s degrees or above at young firms five years of age or less. It also considers additional factors that have an impact on entrepreneurship, including the percent of households with a computer, business investment in research and development, and the miles of coastline and number of mountains a state has.