The annual assessment of how entrepreneurs are doing across the country is out from the Kauffman Foundation — among the best watchers of the nation's startup scene. How do Florida and Tampa Bay fare?
Put politely, they are doing okay, outperforming some other states and metro areas — including Miami, Orlando and Jacksonville within the Sunshine State.
Most places in the country are rebounding after the miserable recession of a decade ago.
Put more bluntly, the Kauffman annual "index of growth entrepreneurship" reveals Florida is good at creating startups, but not so good at turning them into bigger companies five or more years down the road. And Tampa Bay, by Kauffman's measure, slips to No. 26 this year from No. 24 in 2016 in a ranking of the 40 largest metro areas based on entrepreneurship growth.
Ranked last at 40th, Jacksonville performed so poorly in Kauffman's analysis that the average surviving company there was smaller in staff size at five years old than the average startup was at the moment of birth. Ouch.
Tampa Bay's ranking feels, as they used to say, like a "gentleman's C" — an inflated passing grade for a less-than-stellar performance. It means Tampa Bay's so-called entrepreneurial ecosystem could be running faster and smarter than it is.
Entrepreneurial growth, Kauffman cautions, continues to be a rare phenomenon anywhere. "Most firms are not growth firms," it says.
The Kauffman report also issues a striking warning that business startups — traditionally touted as good at generating jobs as young companies grow — may no longer provide that economic boost for employment.
Despite the rebound in recent years, fewer companies are growing to become medium-sized or larger in terms of employment when compared to the levels in the 1980s and '90s, the report said. "High-growth companies today create fewer jobs than they did in the past. Thanks to the leveraging potential of technology, revenue and value creation can take off dramatically while job growth lags behind."
Among the largest states, these five had the highest levels of growth entrepreneurship in 2017: Virginia, Georgia, Maryland, Massachusetts and Texas. And here are the five metro areas with the highest levels: Washington, D.C.; Austin, Texas; Columbus, Ohio; Nashville, Tenn., and Atlanta.
Competition for venture capital is no longer national but global, warns National Venture Capital Association CEO Bobby Franklin in a foreword to the Kauffman index report. "Twenty years ago, U.S.-based startups attracted more than 90 percent of global venture capital investment," he states. "Ten years ago, our share shrank to 81 percent and, astonishingly, it slipped to 54 percent last year.
"Truth be told, the pie is getting bigger, which is a good thing," he says. "But as the pie gets bigger, we want to ensure the United States' slice grows with it."
And Tampa Bay, of course, wants its morsel of that slice to grow, too.
An update on the state of how Tampa Bay's support system for entrepreneurs and startups is doing will be offered Nov. 15 at the University of Tampa.
Contact Robert Trigaux at [email protected] Follow @venturetampabay.
By the numbers
26: Tampa Bay's rank among top 40 U.S. metro areas for growth entrepreneurship.
24: Florida's rank among 25 larger states for growth entrepreneurship.
3: Florida's rank among 25 larger states in startup activity (rate of new entrepreneurs).
19: Florida's rank among 25 larger states in rate of established small businesses.
Source: 2017 Kauffman Index