America, as we all know, is “the land of the free and the home of the brave.” It’s also the land of the entrepreneur.
This is abundantly clear from recent statistics published by the Kauffman Index of Entrepreneurial Activity. More than half-a-million new businesses are created in the United States every month—543,000 new businesses, to be exact. This added up to a total of more than 6.5 million new businesses started in the U.S. in 2011.
The U.S. has been widely viewed as the best place in the world to start a new business since we rose to become the world’s dominant economic power in the years following World War II. Despite the major economic downturn of a few years ago and the inconsistent recovery, this perception has only grown in recent years.
In fact, many experts attribute the current boom in entrepreneurship at least in part to the recession and large number of corporate layoffs. Rather than join millions of other unemployed individuals just looking for another job, many have decided to start their own businesses instead.
Pink Slip = Entrepreneurial Opportunity
For many of these corporate refugees, a pink slip represented an opportunity to fulfill their long-suppressed entrepreneurial dreams. Some decided to turn their hobby or passion into a full-blown business, while others acted on an idea they had been noodling for years.
One recent example of the new 21st century entrepreneurialism is Instagram, a technology company started in San Francisco in October of 2010 that was acquired by Facebook last month for $1 billion—that’s less than two years after the company’s launch! The acquisition of Instagram is Facebook’s largest so far.
The results of the Small Business Survival Index 2011, which is published annually by the Small Business and Entrepreneurship Council and ranks state policy climates for entrepreneurship, closely mirror those of the Kaufmann Index. Texas, Colorado and Arizona are all listed among the top 15 states in terms of their friendliness to small business and entrepreneurship.
The states that are the most entrepreneur-friendly, as measured by the Small Business Survival Index, tend to make public policy decisions that are beneficial for small businesses with regard to taxes, government spending and debt, health care policies, energy and various regulatory costs, and private property rights.
Texas has consistently ranked at or near the top of the Small Business Survival Index for years. “Public policy in Texas is much friendlier to business than it is in most other states,” notes Raymond J. Keating, chief economist at the Small Business and Entrepreneurial Council and author of the Small Business Survival Index.