According to the State Entrepreneurship Index, which measures entrepreneurial activity on a state-by-state basis, Texas ranks number 9 in the nation in terms of entrepreneurial activity. As such, the state moved up an impressive 25 spots when comparing 2010 to 2008.
The index, which was developed by economists from the Bureau of Business Research and Department of Economics at the University of Nebraska-Lincoln, evaluates several different components. These include:
• The percentage growth and per capita growth in the state’s business establishments
• The state’s business formation rate
• The number of patents held per thousand residents in the state
• The gross receipts of sole proprietorships throughout the state
• The number of partnerships per capita in the state
The information used in this system is gathered from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, the IRS Statistics of Income Bulletin and the U.S. Statistical Abstract. After evaluating these factors, each state is assigned a ranking that is based on the state’s performance as it compares to the nationwide average.
While numerous factors have helped Texas achieve an Entrepreneurship Index score of 1.54, the increased amount of focus placed on public and private business schools has played a significant role in the change. In March 2010, for example, the University of Texas launched Texas Venture Labs, which made it possible for students to obtain work experience similar to that which takes place at venture capital firms. The program also serves as a resource to both student and faculty entrepreneurs. Other initiatives that have helped increase the state’s Entrepreneurship Index include the addition of the Acton MBA, the Hankamer School of Business at Baylor University and the McCombs School of Business at the University of Texas.