Kentucky was among the top states in the nation in terms of new start-up companies formed in 2011, according to the results of the annual Kauffman Index of Entrepreneurial Activity report.
The commonwealth tied for the eighth-highest number of start-ups in 2011, a result of a more than 27 percent increase in entrepreneurial activity since 2010. Kentucky’s rate of growth in entrepreneurship from 2001 to 2010 was the fifth highest among all 50 states.
Kentucky’s rise is particularly encouraging considering that entrepreneurial activity decreased overall nationwide from 2010 to 2011 and in all regions of the country except the Northeast, which experienced a slight increase in rates. In the South, entrepreneurship rates in 2011 decreased overall by more than 8 percent.
Although the nationwide rate of new business creation dipped during 2011, entrepreneurship nationwide remained above pre-recession levels.
“The Great Recession has pushed many individuals into business ownership due to high unemployment rates,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “However, economic uncertainty likely has made them more cautious, and they prefer to start sole proprietorships rather than more costly employer firms. This ‘jobless entrepreneurship’ trend negatively affects job creation and the larger economic recovery.”