Donald W. Reynolds National Center For Business Journalism

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The Kauffman Indices provide a wealth of resources and story ideas about small business

February 2, 2016

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ProPublica recently published a story on how health insurance companies are buying up people’s personal information to set costs.(Photo courtesy of DARPA/Wikimedia Commons)

If you’ve ever wanted an easy, yet exhaustive, source of metropolitan, state, and national-level data on entrepreneurship and small business activity, you’ve found it.

The newly released Kauffman Indices, commissioned by the Ewing Marion Kauffman Foundation, contain a wealth of numerical data about entrepreneurship and small business trends in the U.S. The data, calculated into certain metrics (explained further below) draws from the U.S. Census, the Current Population Survey and the Bureau of Labor Statistics.

These indices — the Main Street Entrepreneurship Index and the Startup Activity Index — contain particularly intriguing national findings for business reporters. For instance, 40 percent of new entrepreneurs are nonwhite. The percentage of entrepreneurs aged 20-34 is down 28.8 percent from 1997.  Main street entrepreneurship (established small business) activity reversed a six-year trend with a large increase in 2015 (while still  below pre-recession levels). Explanations of the two indices, the interactive data they provide and story ideas you can cull from that data follow.

Using the Kauffman Main Street Entrepreneurship Index

The Main Street Entrepreneurship index examines the activity of established small businesses, as well as that of their owners. The index contains a ranking system for each state’s Main Street entrepreneurship activity, comparing it to other states’ activity, rather than its own past performance.

Primarily, the index tracks the percentage of small business owners in a given area (referred to as rate of business owners in the index), and the number of small businesses per 100,000 resident population in a given state (referred to as established small business density in the index). From there, the number of employees in these small businesses is measured with business owners broken down by gender, race, nativity, age and education.

While small business can encompass everything from a retail store to a technology company, this report provides a solid measure of how much entrepreneurship occurs in a state.

Using the Kauffman Startup Activity Index

The Startup Activity index tracks exactly that—activity related to startups between 1997 and 2015. This report defines a startup as an under-1-year-old business employing at least one other person besides the owner.

This index’s primary metrics are the percentage of adults becoming entrepreneurs in a given month (called the rate of new entrepreneurs in the report), the number of startup firms per 100,000 resident population (called the startup density in the report) and the percentage of new entrepreneurs starting businesses due to opportunity, rather than necessity (called the opportunity share of new entrepreneurs in the report).

The report tracks national trends in all three, with opportunity share of new entrepreneurs and rate of new entrepreneurs being further broken up into trends by demographic.

If you’re reporting on startup activity in a given state, this report offers a great source of statistics for your story. Other ways to get this data online are detailed below.

Interactive data resources

The Kauffman Index’s website also contains several interactive databases from which you can drill deeper into the raw data, complete with Tableau-designed charts, graphs and maps. The databases include demographic data on small business owners, also divided into national, state and metropolitan area data.

The Kauffman Indices offer excellent data to enhance stories you’re already reporting on concerning small businesses, entrepreneurs, startups and other business-related topics. Even consult the indices for new story ideas.

Story ideas from the indices

  • How does the number of business owners in your state/metro area compare to surrounding or nearby areas?
  • How has this number changed over time?
  • Is your state a hotbed for small business? Ask business owners whether the state offers advantages to start their business in.
  • How does the number of startups in your state compare to surrounding states?
  • What sort of startup culture has formed in your state?
  • How have entrepreneur demographics in your state or metropolitan area changed over time? What local societal factors contributed to the change?
  • How do the reasons attracting startup entrepreneurs in your area compare to those insights in the Startup Activity Index’s opportunity share of new entrepreneurs metrics.

For more information about the indices, visit www.kauffmanindex.org.

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