DFW Innovation Economy is a serial look at chapters from the 2018 Innovation Assessment produced by the Dallas Regional Chamber (DRC) and Accenture. Each chapter of the Assessment comprises key metrics that can be tracked over time to evaluate the strength of Dallas-Fort Worth’s innovation economy in relation to competitor metropolitan areas. Measures related to patent production, venture capital flows, educational attainment, business climate and various metropolitan rankings help to paint a picture of innovation-driven economic growth potential of DFW.
In this seventh installment about the drivers of an innovation economy, we explore why metropolitan areas around the world are supporting their entrepreneurial communities. Ambition, drive, purpose—these are just a few of the qualities that define what it means to be an entrepreneur. Entrepreneurs are risk-takers who not only start businesses to address a perceived need in the marketplace, but also serve as primary job generators. According to the Small Business Administration, small businesses make up more than 99 percent of U.S. employer firms and create 62 percent of net new private-sector jobs. Because entrepreneurs often seek to provide new and disruptive approaches to marketplace challenges, the strength of a metro’s entrepreneurial ecosystem can provide insight into the innovation potential of that region.
THE STATE OF ENTREPRENEURSHIP
The very nature of entrepreneurism indicates a drive to innovate to overcome marketplace challenges. Individuals willing to risk starting new ventures accept that failure is a potential outcome. But for those who succeed, the reward of growing a startup into an established business can be substantial. The count of net new businesses in a region—the number of establishment births minus establishment deaths in a given year—provides insight into the entrepreneurial spirit and to the support network available to entrepreneurs in the region. Net new businesses created in 2014-2015, the latest data available, is presented below. The Kauffman Foundation, known for its entrepreneurial expertise, further delineates the innovation potential of metros by tracking the proportion of entrepreneurs among the adult population, as well as the proportion of entrepreneurs who start a business because they see an opportunity and not as a response to unemployment. Data from 2010-2016 are presented for select metros following the small business graphics.
Many industry lists recognize and honor success, innovation, and growth in startups and small businesses. Entrepreneur Magazine’s Entrepreneur 360 and Inc. Magazine’s Inc. 5000 are two of the best known. The Entrepreneur 360 awards are reserved for small businesses that are exceptional performers in the areas of impact, innovation, growth and leadership. Inc. 5000 ranks the nation’s fastest-growing private companies. To qualify, companies must be US-based, privately held and independent, and should be able to show three full calendar years of sales. The number of companies produced by a region that qualify for these lists serves as a testament to the local drive to innovate.
PART 1: DFW INNOVATION ECONOMY
Metropolitan Rankings from Trustworthy Sources
Part one captures how experts position DFW as a center for innovation. See how DFW stacks up in a Scorecard that benchmarks our rankings against peer cities.
PART 2: DFW INNOVATION ECONOMY
Part two in our innovation economy series highlights population growth and talent attraction as a first look at regional innovation potential. Here’s how DFW stacks up.
PART 3: DFW INNOVATION ECONOMY
Learning to Adapt
Part 3 of our innovation economy series explores the theme of knowledge — the current state of educational attainment and the quality of educational opportunities by metro area. Here’s how DFW stacks up, in four charts.
PART 4: DFW INNOVATION ECONOMY
The Next Big Breakthrough
Part 4 of our innovation economy series examines the role of ideas — where they are nurtured and how to protect them.
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