New Business Creation in Rural New England

Entrepreneurship has been attracting attention as a model for rural economic development following several influential studies showing that new-business formation is strongly correlated with regional growth and job creation.1 Some observers see a focus on rural entrepreneurship as inherently more cost-effective than traditional business-attraction efforts and more closely aligned with other development goals, such as reducing the dependency of rural communities on a few dominant employers. Nevertheless, rural areas face challenges that must be understood before an effective entrepreneurial climate can be developed. To gain an understanding of the situation in rural New England, we can look at the U.S. Census Bureau’s Statistics of U.S. Businesses (SUSB) and review recent trends in new-business creation. The SUSB reports on the number of independent—that is, nonsubsidiary—business start-ups by county and industry for each year between 1998 and 2006. (It excludes nonemployer businesses, private households, certain types of agricultural production, and most government entities.