Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the US, and according to its latest report, the rates of new business creation in 2009 were the best in the last 14 years, topping even the 1999-2000 peak technology boom. In a way this is to be expected as a record numbers of unemployed and lack of jobs are always conducive to an increase in entrepreneurial activity. We have remarked earlier how the recession has a tendency to create new path breaking companies and that new fortunes will be made. The entrepreneurial activity rate increased for both men and women in 2009.

The report makes for a fascinating read. It is free to download, so go ahead and get it from the link above in this article. It provides data and charts looking at the entrepreneurial activity over the years broken down by many different factors. For example, I found it surprising that Seattle, the land of Starbucks and Microsoft, had the lowest entrepreneurial activity in 2009 among all the large metropolitan areas in the US, Houston topping the list. Also fascinating to see is that the entrepreneurial activity among the older age groups (55-64 yr old) is witnessing a significant increase.

Personally, I was dismayed to find Michigan as one of the states that brought up the rear. Not surprising, given the fiscal mess that the state is in currently and its business hostile tax structure. In fact, it may be enlightening to correlate this report to the level of tax burden imposed on the business in various states.