Useful Stats: Net establishment creation by state and establishment size, 2019

Innovations are often born from small businesses, operating with few employees, if any at all, to bring new technologies and processes to market. However, new small businesses frequently fail and are not the only source of innovation. Understanding the regional dynamics of business creation can help leaders better support their regional innovation economies, and this edition of Useful Stats builds on our previous analyses of net establishment creation and net job creation by state and by industry to explore net establishment creation by state and by establishment size (as measured by the number of employees) for 2019.

This analysis utilizes the Census Bureau’s updated Business Dynamics Statistics to shed light on net establishment creation (calculated as the difference between new establishment openings and establishment closures) by establishment size category at the state level in 2019. The size categories used in this analysis are: a) 1 to 9 employees; b) 10 to 19 employees; c) 20 to 99 employees; d) 100 to 499 employees; and e) 500+ employees.

Nationally in 2019, establishments with 1 to 9 employees experienced the greatest net establishment creation (47,538 establishments); followed by 10 to 19 employees (3,122 establishments); 20 to 99 employees (1,530 establishments); 100 to 499 employees (418 establishments); and 500+ employees (25 establishments).

As seen in the map below, while the 1 to 9 size group was the top contributor to net establishment creation in most states (36 states) in 2019, other size groups were also represented in some states. The 10 to 19 group was the leader in net establishment formation in nine states (Iowa, Louisiana, Michigan, Mississippi, Nebraska, New Mexico, Ohio, South Dakota, and Wisconsin). The 20 to 99 group was the top contributor to net establishment creation five states (Alaska, Illinois, Kansas, Oklahoma, and Vermont). The 100 to 499 size group was the largest contributor to net establishment creation in only West Virginia.

Nationally in 2019, no size group experienced net establishment losses. However, several states experienced net establishment losses in one or more size categories in 2019 as seen in the image below. For the size groups 1 to 9, 10 to 19, and 100 to 499 employees, there were 11 states in each group that experienced net establishment losses in 2019. Net establishment losses in 2019 in both the 10 to 19 and the 500+ employee groups were limited to only four states.

Click here for the data used in this analysis.