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Austin Leads Nation in Startups

published on July 20, 2015

Austin skylineAustin is now the national leader in startups, following its number two spot in 2014. With 180 startup businesses, Austin unseated Silicon Valley for the title of the number one city in the nation for startup businesses, according to the Kauffman Index Report, which measures entrepreneurship at national, state, and metropolitan levels.

Fellow Texas cities Houston and San Antonio also made the top ten, at spots eight and ten, respectively. Helping spur this innovation is the job growth rate in Texas, which has remained positive for 60 consecutive months, according to Texas Workforce Commission statistics. Rounding out the top five cities for startups were Miami, Florida; San Jose, California; Los Angeles, California; and Denver, Colorado.

In addition, Austin’s rate of new entrepreneurs, one of the components of the Kauffman Index, was the highest in the nation, with a 0.55 percent rate of new entrepreneurs, equating to 550 new entrepreneurs per 100,000 people per month on average. The report also looked at the opportunity share of new entrepreneurs, meaning new entrepreneurs who entered the market because of opportunities they recognized, versus those who were unemployed at the time. Startup density was another factor.  

According to the Kauffman Report, new business creation rose in 18 of the nation’s 40 largest metro areas in 2014, with startup activity “largely clustered in western and southern cities.”

The environment in Austin is proving ripe for entrepreneurs and for innovation in general. Since 2011, Austin’s technology job base has grown 17.8 percent, much due to “eastward migration by California-based companies,” according to Globe St. Unemployment in Austin is at 3.1 percent, down from 4.1 percent a year ago, trending lower than state and national averages.

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