New research from Ian Hathaway of the Center for American Entrepreneurship confirms a common theory in economic development circles: that high-growth firms are predominantly found in large and mid-sized cities with high densities of talented workers and a culture of entrepreneurship.
Hathaway’s research uses data from Inc. Magazine’s Inc. 5000 lists for each year from 2011 to 2017, with a focus on the 14,000 unique companies from the lists that meet the OECD definition of high-growth – annualized revenue growth of 20 percent or more each year during a three-year period.
Using a linear regression analysis, Hathaway finds that the density of high-growth firms is heavily associated with high levels of educated workers, high-tech employment, mid-career professionals, and new business formation.
The metropolitan areas with the highest density of high-growth Inc. 5000 firms are Boulder (367 per one million residents), Provo (341), Washington D.C. (329), Huntsville (297), Austin (289), and Salt Lake City (232), according to the analysis.
Additional data is downloadable in excel format from the Brookings website: https://www.brookings.edu/research/high-growth-firms-and-cities-in-the-us-an-analysis-of-the-inc-5000/