UNL report: Nebraska moves up in national entrepreneurship rankings

The state of Nebraska rose three spots to No. 21 in the newly released State Entrepreneurship Index, a nationwide analysis and ranking system that compares how states stack up in terms of business formation and innovation.

The State Entrepreneurship Index, or SEI, was developed by economists at the University of Nebraska-Lincoln's Bureau of Business Research and Department of Economics. The Cornhusker State was ranked No. 24 overall in 2008, the last time the index was calculated, said Eric Thompson, UNL associate professor of economics and director of the bureau.

"Nebraska's rank rose because of an improving business formation rate," Thompson said. "The number of firm births per capita rose in Nebraska between 2008 and 2010. By 2010, Nebraska ranked in the top half of states by this measure."

The SEI combines five key components -- a state's percentage growth and per capita growth in business establishments, its business formation rate, the number of patents per thousand residents and gross receipts of sole proprietorships and partnerships per capita -- to build its state-by-state rankings.

A state index for each component is assigned based on how much each state's performance is above or below the average of all state data, which has a value of 1.0. For example, a component one standard deviation above the average gets a value of 2.0, while a component one below is assigned a value of zero. A state's overall SEI number is the average of the five index values.

For 2010, the latest year for figures, Nebraska's index score was 1.17, the new report showed. The state was ranked in the top 10 for its per-capita gross receipts -- the total amount sole proprietorships received from all sources without subtracting any costs or expenses -- but ranked just 40th in patents per capita.

"Nebraska's ranking in patents per capita may improve in the years to come, further boosting the state's overall ranking," Thompson said. "Patent activity in Nebraska should benefit from significant investments by the state's universities in research activities and technology transfer."

Nebraska ranked third among neighboring states, behind Wyoming (1.33) at No. 16 nationally and Kansas (1.23) at No. 18. Meanwhile, South Dakota (1.09) was No. 27, Missouri (1.06) was No. 28, Colorado (0.91) was No. 33 and Iowa (0.75) was No. 38.

Nationally, New York held onto the top spot from 2008 with an index score of 2.34. Washington (2.17), Massachusetts (2.04), New Jersey and Oregon (both at 1.93) completed the top five.

South Carolina, with an index of 0.07, was No. 50. Arizona (0.11) was No. 49, behind Mississippi (0.32), Nevada (0.33) and Alabama (0.41).

The State Entrepreneurial Index combines detailed data from the Bureau of Labor Statistics, the Internal Revenue Service Statistics of Income Bulletin, the U.S. Census Bureau and the U.S. Statistical Abstract. To view the full report, "Entrepreneurship in Nebraska," and also to see state-by-state rankings, go to http://bbr.unl.edu.

WRITER: Steve Smith, University Communications, (402) 472-4226