Massachusetts Ranked #1: Perhaps Entrepreneurs Can Stay East After All

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Massachusetts Ranked #1: Perhaps Entrepreneurs Can Stay East After All


A little while I ago, I wrote an article on this blog titled “Go West, Young Entrepreneur!  Is The Valley Better For Software Startups?”. 


Now, I’ve come across some new information that causes me to reconsider this point of view.  Business Week posted an article recently titled “Ranking The States For The New Economy”, which cites a recent study by the Kauffman Foundation, a well-known private foundation that promotes entrepreneurship.  The study provides detailed rankings on how states in the U.S. are adapting to the challenges of a global, entrepreneurial, and knowledge-based economy.  The study was previously conducted in 1999 and 2002.


I’ll jump to my punch-line first:  In both 1999 and 2002, Massachusetts topped the list.  This year, not only did Massachusetts top the list, but increased its lead over the other states.  


A few things from the article and the study that I found interesting:


  1. MA ranked #1 overall, and also ranked #1 in “workforce education”, a weighted measure of educational attainment of the workforce. 


  1. MA also ranked #1 in the “Hi-Tech Jobs” indicator defined as the jobs in electronics manufacturing, software, computer-related services, telecommunications and biomedical industries as a share of total employment.  


  1. MA had the fourth-highest increase in per-capita income.


  1. Another surprise:  #2 and #3 were New Jersey and Maryland.  In case you’re wondering, California came in at #5.


  1. California ranked #1 in “Inventor Patents”, defined as the number of independent inventory patents per 1,000 people.


  1. The bottom two states that “didn’t adapt well to the new economy” were West Virginia and Mississippi.


  1. Vermont (yes, Vermont!) ranked #1 in entrepreneurial activity.  I found this surprising.  The study states that this may be due to fewer traditional employment opportunities in rural areas.  MA came in at #43 and CA at #9.


  1. MA ranked #1 for the “Venture Capital” indicator (which I found surprising too).  


So, what do you think?  Do any of these results surprise you?  If you are an entrepreneur, does data like this influence your thinking at all as to where you might kick-off your startup?  Would love to hear your thoughts.


Posted by Dharmesh Shah on Thu, Mar 01, 2007


Doesn't surprise me...I grew up and went to school in Mass. The state values education and puts its money where its mouth is. There are tons of colleges up there, which doesn't hurt. Regarding Maryland, most of those stats are probably boosted by the DC metro area. I-270 is a high-tech corridor, with lots of big (and small) government contractors. Northern VA isn't doing too bad, either.

posted on Thursday, March 01, 2007 at 11:28 AM by Trent

Linux is a piece of shit

posted on Thursday, March 01, 2007 at 11:29 AM by Steve Maxwell

I've spent multiple years each in Boston, DC, and SJC. SJC was hands down much better in activity, funding, and attitude. Whoever did the study obviously had no dirt under their fingernails.

posted on Thursday, March 01, 2007 at 12:05 PM by JP

I second JP's response. I lived in DC before moving to Mountain View, CA last year. There are so many more resources and opportunities out here for entrepreneurs.

posted on Thursday, March 01, 2007 at 12:35 PM by Ryan

Im not surprised, many colleges in Mass. have a strong entrepreneurial focus. For instance; Babson, Harvard, and MIT are ranked as the best schools for entrepreneurship in the world.

posted on Thursday, March 01, 2007 at 12:44 PM by Will

This isn't surprising. New England places a big priority on education. Many people live in rural small towns where a sense of entrepeneurship and self-reliance is needed in order to survive in such a high-tax state.

posted on Thursday, March 01, 2007 at 12:49 PM by Boston Girl

This has more to do with difference between in size of the two states. A more fair comparison would be to compare the Bay Area to the greater Boston metro area. Boston is going to have a much larger influence on metrics for the state of Massachusetts than the Bay Area on the state of California, just do to the relative size differences.

posted on Thursday, March 01, 2007 at 1:08 PM by Sam Carter

I agree with Sam above from the perspective of someone new to Boston. The metro area here is definitely smaller, but that really does help foster a closer, more tight knit VC and entrepreneur community. More people get to know each other and everyone is somehow connected whether it's the through the VC, entrepreneurs, grad students, or high tech companies and startups. (I lived in the valley for 8 months as well, and it just seemed a little too big....)

posted on Thursday, March 01, 2007 at 2:36 PM by Chris Keller

So, I went to school in the Boston and the Bay Area (Stanford & MIT) and started two companies (one on each coast). First thing I have to say is that both Boston and the Bay Area are phenomenal places with tremendous amounts of energy and intellectual depth. And each has its advantages. I felt that the biggest upside of being at MIT/Boston (esp being a risk-loving startup type) is that there are more untapped opportunities - ex. many professors funded by DARPA who are sitting on world-changing technologies and not thinking about doing startups. The biggest differentiator of the Bay Area in my opinion is attitude. This is a big generalization, obviously, but the Bay Area is infused with an enthusiasm and openness that is just not present in the old boy's club that is the East Coast. When I was starting a company in Boston, all the industry veterans were stumbling over each other to tell me that I was stupid for trying to start something in an industry that I hadn't spent the previous 20 years working in. In the Bay Area, by and large, people seemed to stumble over themselves to give me advice and share contacts. Again, this is a major generalization, but the attitude is different and it does matter. All this being said, I can say that hands down, I'd rather be in the Bay Area. But again, that is a matter of personal style. Now, the big question is whether anyone involved with creating this big study ever started a company - I always found it humorous to be taught about entrepreneurship by people who didn't start companies - it's like sex-ed being taught by a nun.

posted on Thursday, March 01, 2007 at 2:59 PM by Ravelous

This study sounds a bit wacked to me. Vermont #1 in entrepreneurial activity? Not by any reasonable measure I can imagine. And MA #1 overall? Doesn't seem right to me. If education is the driving factor, then maybe, but by sheer dollar value of venture investments, CA and the Bay area are eating our lunch by a factor of 4:1 - and the gap is growing, not shrinking.

I'd agree with Ravelous and others about attitude. Boston entrepreneurs are entrepreneurs in a futsy New England-y way - relatively closed, pretty careful and conservative. Sort of the workmanlike model for entrepreneurship vs. a more free wheeling model on the west coast. More of a focus here on minimizing downside risk vs. maximizing upside potential.

I also think Bostonians stick to their knitting in a way other regions maybe don't so much. If you aren't focused in areas like B2B IT solutions, biotech, and medical devices where Boston has pretty strong ecosystems, then you pretty much might as well be in Iowa.

posted on Friday, March 02, 2007 at 6:27 PM by John Kenney

Perhaps someone reading this in Boston will make the short trip to NYC Oct 22-23 for Sun Microsystem's free Startup Camp. I'm going and I'm from Cleveland!

posted on Friday, October 12, 2007 at 12:27 PM by Bill Hiller

I'm not shocked... a lot of colleges in Mass. have a solid entrepreneurial focus such as Babson, Harvard, and MIT. They ranked as the best schools for entrepreneurship in the world.

posted on Saturday, February 21, 2009 at 10:12 AM by Motorola Krave

I'm not shocked... a lot of colleges in Mass. have a solid entrepreneurial focus such as Babson, Harvard, and MIT. They ranked as the best schools for entrepreneurship in the world.

posted on Saturday, February 21, 2009 at 10:14 AM by Motorola Krave ZN4

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