Inc 500 and the most entrepreneurial cities in America

The most recent issue of Inc. Magazine, September 2008, Inc. featured the Inc. 500 Fastest-Growing Private Companies.  The winners are clustered around distinct major metropolitan areas within the United States and the statistics are very interesting.

For example, the states with the most companies per million residents rank:

  1. Utah
  2. Massachusetts
  3. Virginia
  4. Georgia

The cities with the most companies rank:

  1. Washington, D.C.
  2. New York
  3. Atlanta
  4. Chicago

Finally, the cities with the most companies per million residents rank:

  1. Provo
  2. Austin
  3. Washington, D.C.
  4. Raleigh

What is interesting to me are a number of things.  Namely, the cities that I would have expected to rank high on the Inc. 500 would have been Los Angeles and San Francisco, which are typically considered the entrepreneurial proving ground or heartbeat of U.S. business.

In addition, East Coast regions are dominating the Inc. 500 landscape.

Finally, some of the cities and regions that rank the highest have relatively lower costs of living, e.g., Austin, Raleigh, and Georgia.  Virginia is particularly fascinating in that it boasts some of the lowest unemployment rates in the country yet the cost of living is not necessarily the highest.  Certainly, Los Angeles, New York City, and San Francico have higher costs of living that the Washington, DC metropolitan area.  To me, this translates into an optimal earnings to expense ratio vis-à-vis cost of living.