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Phoenix ranks eighth in nation in startup business activity

PHOENIX — A new report showed that the Phoenix metro area is ranks eighth in the U.S. in activity of startup businesses, sitting just behind New York City and ahead of places like San Francisco.

“That’s seven spots too low,” Phoenix mayor Greg Stanton said with a laugh.

The 2017 Kauffman Index of Activity is a self-described “comprehensive indicator of new business creation in the United States, integrating several high-quality sources of timely entrepreneurship information into one composite indicator of startup activity.”

The Phoenix-Mesa-Glendale area scored a 1.83 on the index, which listed Phoenix’s “startup density” — the number of businesses in a city that are startups per 1,000 companies — as 92.1. By comparison, the first-place city was Miami, which scored a 4.47 on the index and had a startup density of 107.8.

Phoenix’s No. 8 ranking on the list is two spots ahead of its tenth-place finish last year.

“We don’t have a lot of fortune 500 companies,” Stanton said. “We haven’t been big that long. So, there’s really an entrepreneurial spirit here in Phoenix second-to-none in the United States. So I’m not surprised that Phoenix would be ranked so high on this list of startup economies.”

The eighth-place finish put the Valley metropolis ahead of places like Houston, San Francisco, San Jose, Seattle and others.

“Capital is going to find talent,” Stanton added. “And we are blessed here to have great higher education institutions like Arizona State University, like Grand Canyon University, like our wonderful community college system.

“So you can find talent and you can live here and have quality of life second to nowhere in the United States of America. Obviously it’s less expensive than the bay area and Silicon Valley, but in addition to being less expensive, you can find people just as talented. And so tech companies have figured that out and they are moving here in droves.”

KTAR News’ Tom Perumean contributed to this report.

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