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Is Boston an entrepreneurial city?

Not really, according to the Kauffman Index of Entrepreneurial Activity, which evaluates regions, states, and metro areas based on per capita business start-ups. Boston does not appear among the 10 most entrepreneurial cities in the 2008 index, listed here starting with No. 1 Atlanta:

Atlanta
Phoenix
Riverside
Miami
Los Angeles
New York
San Francisco
Dallas-Fort Worth
Houston
Washington DC

It's not great news for the major eastern and midwestern cities.

Among the 15 largest metro areas, Boston finishes on the lower end.

Among the states, Massachusetts ranks somewhere in the middle.

For a short feature from RealClearPolitics:
http://www.realclearpolitics.com/lists/most_ambiti...

For the full Kauffman pdf report (36 pp.):
http://www.kauffman.org/uploadedFiles/kiea_042709.pdf

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Comments

Looks like they were looking at any kind of entrepreneurial activity of adults 20 til retirement-ish age, and then ranking cities per capita.

I bet our student population and large employers aren't helping our numbers, but those things are good.

I don't mind if Boston has a few less nail salons and convenience stores.

We need our biotechs and we need more high-techs.

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I agree that low-end retail is not the kind of start-up we need more of. I'm wondering, given the heavy concentration of biotech and hi-tech graduates coming out of area universities, whether Boston gets its proportionate share of start-ups in these fields or if more and more talent in those fields is heading out of town.

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My anecdotal impression is that the Boston area is letting a lot of potential high-tech industry potential from MIT slip through its fingers.

It's ludicrous that we have MIT right here in town, yet graduates often thinking they need to move elsewhere for the best jobs or for the best environment for doing their own startup.

We do have some good high-techs. We just could use more, to capitalize on our natural resource of talent and the energy around MIT.

The only objections that high-tech entrepreneurs and workers should have to staying in Boston is that the weather could be better and that it's harder to see Broadway plays.

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While the report does distinguish between necessity and opportunity start ups (the formation rate increased for the former and decreased for the latter in 2008) the overall effect of the survey is to equate start ups with entrepreneurial activity, which I think is a mistake.

At any rate, as the map makes clear the desert states that have pounded the hardest by the recession also had high start up rates, probably because the rapid population growth spurred new establishments (nationally, the construction sector's start up ratio increased by almost 50% from 2001 to 2008 had by far the highest start up ratio. The same was true for start up rates among people with less than HS diploma. Start up rates among immigrants almost doubled. Basically, it was all part of the fake Bush boom).

Oddly, the start up rate for Mass. increased substantially from 96/98 (during the Internet boom that preceded the dotcom boom) to 06/08, while it grew by a mere 0.01 percentage point for the US.

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After witnessing someone open a business, this ranking isn't surprising at all. Boston has so many obstacles and impediments to starting a business, it's ridiculous.

For some types of business, the inspection and licensing process is rigged to discourage all but the most persistent and determined.

The city officials don't seem to have any respect for the jobs and tax revenue that small businesses can contribute. They don't respect appointments, schedules, or the time/money that is often budgeted very closely to ensure viability for the business.

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Yes, I've heard these complaints too. The combination of city bureaucracy and the political scene here can make a rough go of it for those who want to launch a business.

Last year I bumped into an acquaintance who was opening a retail business, and he looked so darn weary from navigating the Boston hedgerow that confronts start-ups. And this guy is experienced in running a business, so it wasn't rookie exhaustion at play.

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FWIW, which ain't much, I know..

My corp is already domiciled out of state and I will be following it sooner rather than later. It really is just too damn hard here to bootstrap or just really get by day to day. They've done an amazing job of creating the appearance of efficiency and ease, without actually providing it. Web sites, forms, hot line numbers... forget it. There's nothing at the other end worth interacting with.

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Everybody wants business to be regulated into providing for social needs such as healthcare, but they forget that it comes at a cost. The taxes and regulations are high and so people go elsewhere.

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For years we have been told that the total cost of doing business in MA, which has been largely dominated by extreme real estate costs (which also force up wages), chases away business starts. There has also been much grumbling over the state-local turf war crap that goes on, and the town-to-town rule changes that make no sense.

Do you have any data to support your theory of health care and social costs driving out companies? Any documented examples? Would it even be possible for companies wanting to attract good workers avoid paying these costs anywhere in the US? Or is this just your personal hypothesis?

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For some reason, standard off the shelf health insurance in California (and many other states I checked) costs less than state-subsidized health care in MA.

For some reason, standard off the shelf car insurance in California (and many other states I checked) costs less than state-rate-set car insurance in MA (I know, MA is deregulating... for the next millennium or two, cuz they can't do it all at once)

Start with that, and extrapolate... it's not that hard really.

I would add the difficult-to-calculate cost of "getting any damned thing done" in MA - particularly in the Boston area - compared to just about anywhere else I've had to get any damned thing done anywhere else in the country. Out in the sticks? Everyone's neighbor knows someone who can come over tomorrow and take care of whatever it is that needs taking care of... cheap. In the real cities (NYC perhaps) there are three guys down at the bodega in your block who can either take care of what needs taking care of, or they have a cousin who can...

then there's Boston. Ten phone calls later and the guy still doesn't show up... that's my experience, over and over and over in my experience and that of a great many people I know.

Ever try to make a doctor's appointment in Boston unless you've got gold plated care and are an old friend of the receptionist? DAMN, people... it's like asking for a favor.

Need to take the commuter rail or the T to an appointment? Please see elsewhere on this site for thorough coverage of the uncertainty associated with most forms of transportation in this state, and public transit in particular, though MassPike and its roadways are holding their own in the confusion/unreliability sweepstakes.

I have no clue what the "cost" of the "Grunt, grumble, mumble, shuffle" economy is, but Boston has perfected it and made it into a standard way of doing business... and I really have not seen anything to compare, in any other place I've been in the country, where I've had money to spend and something to get done that needed the help of the person on the other side of the counter/telephone/transaction, who's busy staring at their shoes, talking to co-workers, walking off without saying a thing to me, or just generally acting the too-important asshole. Who needs that?

That "cost" is the cost of uncertainty. I can make one general statement here about business that is absolutely true: Business does not like uncertainty. Uncertainty equates to risk.

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I work in tech/internet, and left the Boston area a couple years ago. I didn't so much consciously choose to leave as be sucked out of the state as if by a magnetic force. The options staying home for a new job were worse, housing conditions were worse, fewer opportunities and more hassles. Compare with Coastal California which may have high real estate prices but has a much, much higher standard of living across the board.

I don't mean to trash Boston--I LOVE Boston--but it is losing this battle on many many fronts.

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