- New report ranked 40 metropolitan areas based on high-growth entrepreneurship. The report ranked the D.C. region, which includes Fairfax County, as number one.
San Francisco, San Jose, Austin, and Boston may be the brand names for places where start-ups are born, but a new report shows that the Washington, D.C. metro area tops them all.
The Kauffman Foundation, which studies entrepreneurship, measured high growth entrepreneurship in the forty most populous metropolitan areas in the U.S. The D.C. region, which includes Fairfax County, ranked first.
Among the 25 largest states by population, Virginia also saw the highest growth entrepreneurship activity along with four other states.
Fairfax County officials are encouraged by the news as they work to grow and diversify the economy. High-growth companies, especially young ones, contribute to job growth, according to economists.
To stimulate more high-growth start-ups, the county’s strategic Economic Success plan calls for fostering the innovation ecosystem, expanding firms in emerging industries and fostering more research and development, among other actions.
Kauffman’s study looked at three measures:
- The average growth in employment five years after start-ups are founded
- The percentage of start-ups that grew to 50 people or more after 10 years compared to all firms 10 years and younger
- The number of businesses with at least $2 million dollars in annual revenue with 20 percent annualized revenue growth over a three-year period.
For example, the DC metro area has 271.5 high-growth companies per 100,000 employer businesses, according to the report.
Not only did the DC region rank first in all three measures, but also the area also ranked highly for its share of firms in the top five high-growth industries. The region had the highest density of high-growth firms in IT services, and it placed among the top five metros for business products and software companies.
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