Charleston metro area ranked 2nd best place for entrepreneurs

The cities of Charleston and North Charleston have jointly been ranked as the second best place in the nation for entrepreneurial activity in a new national survey published by Entrepreneur magazine.

The survey, conducted by the National Policy Research Council, a Washington, D.C., think tank, is the basis of Entrepreneur’s annual “Hot Cities” ranking. The results appear in the magazine’s September issue.

Overall, the magazine said, the NPRC determined that seven of the top 10 states for entrepreneurial activity are located in the Southeast. According to the study, affordable home prices and lower-cost labor are the biggest factors contributing to this activity.

The report went on say that the Southeast bounced back from the economic downturn of 2001 and 2002 faster than other parts of the country thanks to economic development strategies that stressed diversification of local economics.

National Policy Research Council uses what it calls its Entrepreneurial Activity Index to measure the best places to start and grow a company. The index is made up of two parts, each dedicated to measuring a key aspect of entrepreneurship: business formation and business growth.

To measure business formation, researchers identified the percentage of businesses that were started four to 14 years ago and that employ five or more workers today. To determine growth, researchers measure the percentage of those young businesses that have experienced rapid growth over the last four years.

A locale’s overall entrepreneurial rank is determined by combining these two rankings. Charleston and North Charleston jointly ranked third in both the young company and rapid growth ranking, while other communities numbers diverged significantly in the two categories.

Mobile, Ala., took top honors in the survey as the best place for entrepreneurs to be located. Columbia, S.C., was ranked eighth. Communities in Texas, Wisconsin, Nebraska and Tennessee rounded out the top 10.

Entrepreneur’s full listing includes 276 small, mid-size and large consolidated metropolitan statistical areas in 50 states and 784 counties.