Regional Census Finds Fairfax Leads With the Most Startups In Northern Virginia
Jan. 30, 2017
Fairfax County has the highest density of startups in Northern Virginia, according to the results from Fosterly’s 2016 regional census.
Fairfax is the headquarters location for 14.5 percent of startups, and Northern Virginia is home for 32 percent of startups in the region, trailing just behind D.C. at 40 percent.
Fosterly’s census surveyed startups in the D.C. region, and it provides granular, local data about the area’s innovation ecosystem. Fairfax County and the Fairfax County Economic Development Authority sponsored this research, along with other companies and public agencies.
The census points to the region’s growing entrepreneurial scene, including the number of firms formed, jobs created and revenues generated.
Most startups were founded in the last five years—with 25% setting up shop in 2016. This is an encouraging sign as national economic data show startup creation at a 40 year low. In the U.S., only 8.9 percent of companies were in business for two years or less, says the U.S. Census Bureau in its most recent 2014 survey of entrepreneurs.
Fosterly’s findings also point to positive job growth. It finds that 83 percent of companies will hire full or part-time employees in the next 12 months, with 22 percent planning to hire between five to 10 people.
Startups employ three percent of the nation’s workers every year—yet they account for 20 percent of net jobs created. This finding comes from research conducted by economists from the U.S. Census Bureau and University of Maryland.
This outsized impact is one reason Fairfax County officials are trying to foster more startups and greater entrepreneurship as part of their Strategic Economic Success Plan.
Significantly, the census reveals that most startups make money from selling to the private sector, not to governments as might be expected. The data showed that 77 percent of revenues came from private sector sales, including business-to-business and business-to-consumer sales.
This is important news as Fairfax officials work to diversify county’s economy as federal budgets are expected to continue to be strained. Officials want to attract and expand firms in emerging technologies like translational medicine, data analytics and cyber security.
Fosterly’s figures also point to rising revenues. This year 45% of startups project revenues of more than $500,000—twice the number that exceeded the half million dollar mark in 2015. The number of firms that will record $2 million in revenues or greater is expected to more than double this year compared to two years ago.
This was Fosterly’s first annual census. Their results are based on the data collected, although the survey is not a comprehensive assessment of every company in the region.
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