The Walton Family Foundation released Wednesday (Aug. 13) a report on entrepreneurship that shows startups comprise 37.2% of businesses in Northwest Arkansas, exceeding national and state averages of 35.3% and 31%, respectively.
The study, Entrepreneurial Climate in Northwest Arkansas: A Comparison Across Peer Regions, offers an analysis of business ownership and startups in Northwest Arkansas compared to peer regions: Austin, Texas, Des Moines, Iowa, Durham, N.C., Madison, Wis., Provo, Utah, and Raleigh, N.C. The study was conducted by Dr. Robert Fairlie, an economist from UCLA and developer of the Kauffman Foundation’s Indicators of Entrepreneurship.
According to the authors, strong entrepreneurship data can serve as a progress benchmark and a planning tool for growth.
Following are some of the study’s key findings:
• The area’s opportunity entrepreneurship rate, measured by the ratio of business ownership to unemployment, is on par with that of the peer regions.
• Area business establishment growth is strong, particularly among young firms (under five years), with survival rates above national and state averages.
• Northwest Arkansas business ownership rates remain lower than national and aspirational averages, but are steadily increasing.
“These trends reflect the grit and creativity that define Northwest Arkansas,” said Robert Burns, director of the Walton Family Foundation’s Home Region Program. “While there’s more work to do as we continue to build our local business community, the increase in firm survival and establishment growth is a sign that local entrepreneurs are not just taking risks, they’re building staying power.”
The report also notes an increase in the young firm growth rate, from 4.9% in 2018 to 6.7% in 2021, which outpaces nearly all peer regions except Provo.
“These findings help us better understand where our regional ecosystem is strong and where it needs support, especially when it comes to supporting first-time founders and expanding access to capital and mentorship,” said Yee-Lin Lai, senior program officer focused on advancing the region’s entrepreneurial ecosystem for the Walton Family Foundation’s Home Region Program. “The foundation supported several local accelerator programs and other entrepreneurial initiatives in recent years, and it’s rewarding to see those efforts translating into tangible growth across the region’s startup landscape.”