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Which State Is the Most Conducive to Entrepreneurship?

Mark Marich

Which state is the most entrepreneurial? How about the most innovative? Business friendly? Just plain ready for the 'New Economy'? Obviously the answers depend on the methodology employed to find them -- and there are certainly differences from one study to the next. If you have been a reader of NDE-news (the predecessor to the Policy Dialogue on Entrepreneurship), then you have probably wondered at some point about the number of reports that try to help entrepreneurs identify the perfect location (not to mention helping policymakers determine what changes to make to promote entrepreneurship in their communities). Apparently, so does Matthew Bandyk of U.S. News & World Report. 

Bandyk just posted "The 7 Best States to Start a Business," combining two studies with different approaches and considerably different results. The 2008 New State Economy Index, by the Kauffman Foundation and the Information Technology and Innovation Foundation, with a focus on knowledge jobs, globalization and innovation capacity finds a large proportion of "blue" states at the top. The Small Business Survival Index 2008, by the Small Business and Entrepreneurship Council, with a heavy focus on tax rates and regulatory costs tends to place "red" states at the top.

So what happened when Bandyk combined them?

1. Washington (NSEI: #2 / SBSI: #5)
2. Virginia (NSEI: #7 / SBSI: #9)
3. Colorado (NSEI: #10 / SBSI: #10)
4. Texas (NSEI: #18 / SBSI: #6)
5. Nevada (NSEI: #25 / SBSI: #2)
6. Utah (NSEI: #12 / SBSI: #15)
7. Florida (NSEI: #23 / SBSI: #4)

Check out the U.S. News & World Report for a quick overview for each of the top seven.

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