Southern and Western Cities Lead Entrepreneurship in 2022

Key Findings

• The US has experienced a surge in entrepreneurship since 2020, reflected in the elevated rate of new business creation that has maintained itself three years after the onset of COVID-19: in 2022, 5.1 million new applications for new business were filed, 44% higher than 3.5 million submitted in 2019.

• Though this increase has leveled off, there are little signs the US will return to the pre-pandemic rates of new business creation. In fact, through June 2023, applications are at a level 5% higher than this time last year (2.7 million submitted compared to 2.5 million submitted from January-June last year).

• As Gusto research has previously found, this surge in new business creation has been driven by groups who traditionally have been left out of entrepreneurship, including women and entrepreneurs of color (Black or African American, Hispanic, and Asian entrepreneurs). 

• The center of gravity of entrepreneurship is also shifting from coastal cities in the Northeast and West to the Southeast US and Mountain West, as seen in county-level business application data, recently released for 2022. Overall, there were 15.2 new business applications per 1,000 residents in the US, compared to just 5.3 per 1,000 in 2019. Among major metro areas, Miami, FL had the highest rate of new business applications, at 40.9 per 1,000 residents – indeed, 4 of the top 5 cities were in Florida. Denver and Las Vegas come in at #6 and #7, respectively. None of the top 10 cities were located in the Northeast (New York City is the first at #17).

Most New Business Applications Per 1,000 Residents in 2022: Top 50 Metro Areas

Metro Area	Applications Per 1,000 Residents, 2022
Miami, FL	40.9
Atlanta, GA	31.3
Orlando, FL	26.7
Tampa, FL	24.5
Jacksonville, FL	22.3
Denver, CO	21.6
Las Vegas, NV	21.3
Memphis, TN	20.9
New Orleans, LA	20.5
Charlotte, NC	19.3

• This data also shows a small but meaningful decrease in shares of new businesses started in urban cores, mainly made up for increases in small metros and micropolitan areas. From 2019 to 2022, the share of new businesses in “Large Urban Core” counties (as defined by the CDC) fell from 39.2% to 38.1%, the lowest share going back to 2010 when this series started. The share of business applications outside of large metro areas (to medium, small, and micropolitan areas) rose from 30.2% to 31.3%.

Methodology

This analysis uses data from the Census Bureau’s county-level annual Business Formation Statistics dataset, along with Census county-level annual population estimates to create estimates of business applications per 1,000 residents by county and year. We aggregate business applications and population estimates to the metropolitan area level using the Office of Management and Budget’s 2018 metropolitan statistical area definitions; definitions of “large urban core” counties come from the Center for Disease Control’s urban-rural classification scheme.

Full List of Top 50 Metro Areas

Metro Area	Applications Per 1,000 Residents, 2022
Miami, FL	40.9
Atlanta, GA	31.3
Orlando, FL	26.7
Tampa, FL	24.5
Jacksonville, FL	22.3
Denver, CO	21.6
Las Vegas, NV	21.3
Memphis, TN	20.9
New Orleans, LA	20.5
Charlotte, NC	19.3
Austin, TX	19.2
Salt Lake City, UT	19.1
Dallas, TX	18.8
Houston, TX	18.6
Detroit, MI	18.4
Raleigh, NC	18.0
New York, NY	17.9
Phoenix, AZ	17.7
Philadelphia, PA	17.3
Indianapolis, IN	17.3
Washington, DC	17.2
Richmond, VA	16.8
Virginia Beach, VA	16.5
Oklahoma City, OK	16.3
Nashville, TN	16.1
Los Angeles, CA	16.0
Chicago, IL	15.5
Birmingham, AL	15.5
Baltimore, MD	15.4
Milwaukee, WI	15.4
Columbus, OH	15.2
Cleveland, OH	14.6
Kansas City, MO	14.4
St. Louis, MO	13.7
Louisville, KY	13.4
Sacramento, CA	13.1
San Antonio, TX	12.6
Portland, OR	12.5
San Francisco, CA	12.5
Seattle, WA	12.4
San Diego, CA	12.3
Minneapolis, MN	12.2
Cincinnati, OH	11.7
Riverside, CA	11.6
Grand Rapids, MI	11.2
Boston, MA	11.0
San Jose, CA	9.7
Pittsburgh, PA	9.6
Buffalo, NY	9.4
Providence, RI	9.3