There’s surprising news about start-ups this year

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(This post originally appeared on The Washington Post)

Start-ups are on the upswing, according to the entrepreneurship think tank, the Kauffman Foundation.

The 2016 Kauffman Index of Start-up Activity State and Metro Trends found 33 states experienced higher aggregate levels of new business activity compared to the prior year and 23 of the largest 40 metropolitan areas in the country also saw an increase in the number of new companies.

“Entrepreneurship is recovering from the Great Recession slump,” said Arnobio Morelix, senior research analyst at the Kauffman Foundation said in a statement. “While there is considerable variation from one locale to the next, the aggregate data bodes well for business startup activity around the country.”

That’s good news.  But there’s surprising news from the study too.

For example, New Jersey and Michigan are attracting more start-ups than average.  The Garden State is now ranked No. 7 on the Kauffman Index, up from No. 18 last year.  Michigan jumped from 19th place to 11th.

Montana is also raising eyebrows. Among the smaller states by population, it had the most start-up activity on a per capita basis. In fact, in Montana, there were 500 new entrepreneurs for every 100,000 people.  To compare, California and Texas were both at 390. My home state of Pennsylvania was last with only 180.

Detroit is also making its move. Out of the 40 metropolitan  areas, Detroit placed 30th for start-up growth…but it jumped in a big way from 35th place last year. Other cities that are significantly rising in start-up popularity include Orlando, Nashville and Kansas City.

San Francisco, even though a study this week showed it’s the least affordable place to live in the country, still jumped from 9th place to 4th among popularity for start-ups.

Finally, it’s clear that Austin rocks. It’s not just the music. It’s the tech industry too. Austin was the number one city for start-ups in 2016 with 600 new entrepreneurs for every 100,000 adults.  Milwaukee, by comparison, had only 100.

Why the increase in activity? The economy continues to slowly grow. Plenty of capital is available. Technology is inexpensive and powerful. And many states and cities are reaching out with incentives to attract younger companies. It makes sense.

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