Here's a helpful tool for understanding economic growth.
Ian Hathaway presents a geographic analysis of the "Inc. 5000"—Inc. Magazine's list of the fastest growing businesses in the United States.
With the fast growth of the companies on the Inc. 5000, a deeper analysis of the companies on the list provides insight into the U.S. economy. So, for instance, the information technology and health industries account for almost a third of the companies on the Inc. 5000 list. But there's more to be learned from the list.
"An analysis of the geographic location of I5HGCs reveals another concentration—this time by place," writes Hathaway. "[N]early 98 percent of I5HGCs are located in metropolitan areas. Micropolitan and rural areas are headquarters to just two percent."
The largest metropolitan areas do not lead the country in Inc. 5000 company density, however. "Of the top four metros, three are medium-sized—Boulder, Provo, and Huntsville. Only Washington (a large metro) is not," explains Hathaway.
To conclude the article explaining and illustrating his analysis, Hathaway also shares the results of a linear regression analysis designed to assess the factors association with regional Inc. 5000 company density. The analysis identified four variables as especially important in explaining regional density of Inc. 5000 companies: 1) the share of workers with college degrees, 2) the share of workers employed in high-tech industries, 3) the share of the population f prime entrepreneurship age, and 4) the overall rate of business formation in the region.
FULL STORY: High-growth firms and cities in the US: An analysis of the Inc. 5000
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