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California New Business Creation

Data tells the story: California is a good place to do business

California has long been characterized as a state that is unfriendly to business, from the Tax Foundation ranking California number 48 out of 50 states based on business tax rates, to the Wall Street Journal publishing op-eds describing how California drives away jobs and businesses. California New Business Creation offers a broader examination of business and labor indicators, relying on the U.S. Census Bureau's Business Dynamic Statistics to calculate exactly where California ranks compared to other states.

The report finds California near the top of many key state-by-state rankings, including both new-business expansion and small business growth. California is creating jobs faster than the national average, and while plenty of those new jobs are with existing businesses, many are with new firms.

Further evidence the Golden State is above average when it comes to business and labor indicators comes from Compare50.org, the first-of-its-kind website that provides one-stop-shop access to over 100 big-data metrics for all 50 states. Created by Next 10 with data compiled by Beacon Economics, it shows strong growth for new and existing businesses alike.

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The report finds that in 2013, California ranked:

  • 4th in job creation stemming from new business creation, with a growth rate of 5.5 percent
  • 5th in creation of new businesses
  • 10th in highest entry rate of small businesses with one to four employees, with small firms representing 19.1 percent of new enterprises
  • 4th in total net job creation