The Fraser Institute

The Fraser Institute

December 06, 2007 06:00 ET

The Fraser Institute: Nevada, Florida, and Utah Best States for Entrepreneurs and New Business Start Ups

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 6, 2007) - Nevada, Florida, and Utah lead the United States and North America in encouraging entrepreneurs and the creation of new businesses, according to a new study released today by independent research organization The Fraser Institute.

"Small and entrepreneurial businesses are key to creating new jobs, innovation and ultimately economic prosperity. Consequently, states or provinces with a high level of new business creation are going to have more dynamic and faster growing economies," said Jason Clemens, Resident Scholar with The Fraser Institute and co-author of Measuring Business Creation in Canada and the United States.

The peer-reviewed study finds that most new business creation occurs in the smallest firms, those with less than 10 employees. It then measures the creation of new, small businesses (business "births") during 2002 and 2003 in all 50 U.S. states and 10 Canadian provinces as well as comparing the number of new businesses to the number of firms that go out of business (business "deaths") each year to come up with a net measure of business creation.

Nevada had the highest net small business creation rate at 5.2 per cent, followed by Florida (4.7 per cent) and Utah (4.5 per cent). They are followed in order by Idaho, Montana, Virginia, Georgia, Missouri, Arizona, and Delaware, which shows a diverse geographic pattern of entrepreneurial success across the United States.

Connecticut, West Virginia, and Ohio are the U.S. states with the lowest net creation of small businesses.

Five Canadian provinces -- Newfoundland, Saskatchewan, Nova Scotia, New Brunswick, and Prince Edward Island -- occupy the bottom five spots among the 60 jurisdictions. In fact, Saskatchewan, Nova Scotia, New Brunswick, and Prince Edward Island recorded negative net business creation - meaning they actually lost businesses over the time period studied.

"Business creation is one of the most important measures of entrepreneurial activity. It not only represents the commercialization of ideas, but it also indicates dynamism of an economy," Clemens said.

"The performance of the 50 states varies widely when it comes to net business creation with some states succeeding in encouraging entrepreneurial activity while others lag behind. Legislators from those states with poor records of new business creation need to develop policies that will encourage entrepreneurs to start and grow small businesses."

The Fraser Institute is an independent research and educational organization with offices in Calgary, Montreal, Tampa, Toronto, and Vancouver. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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