Photo Credit: Alamy Stock Photo
While the idea of entrepreneurship might bring to mind famous innovators like Jeff Bezos and Elon Musk, the majority of entrepreneurs simply operate small businesses or are self-employed. Many entrepreneurs build traditional businesses like restaurants and cafes, but oftentimes they make their living through less traditional means, such as real estate or consulting.
Self-employed individuals enjoy the benefits of being their own boss but must also manage the stress of long hours, payday uncertainty, and an unclear path to success. However, technological advancements in recent decades have lowered the barrier to entry, and becoming an entrepreneur is easier than ever before. Thirty years ago, a marketing consultant would need to find clients through their existing network or run advertising, but today, they can easily connect with clients on platforms such as Upwork, Fiverr, or even Facebook.
In the last few years, the sharing economy has further transformed the way Americans start and conduct businesses, and has meant that previous barriers to getting started have been knocked down. The basic premise of the sharing economy is the exchange of goods or services via technology. Now, with less upfront time and costs, aspiring entrepreneurs can easily test new ideas or spin up a side hustle, for instance, by selling a product on Amazon, delivering for Grubhub, or starting a full-time business out of a local coworking space.
The sharing economy has exploded in the last decade. Just 10 years ago, there were only a handful of sharing platforms, such as CouchSurfing, FreeCycle, and ZipCar while the sharing economy giants of today, like AirBnB and Uber, had only recently launched. According to research by PwC, key sharing economy sectors have the potential to increase global revenues from $15 billion in 2015 to $335 billion in 2025.
Alongside rapid growth in the sharing economy, entirely new markets and services have emerged that didn’t exist 10 years ago—providing enticing opportunities for entrepreneurs. In the fast-growing food delivery market, technology platforms like Uber Eats and Grubhub have not only expanded delivery options to a broader range of existing restaurants, but also encouraged entirely new “virtual restaurants” to open in shared kitchen spaces. With reduced overhead, virtual restaurants are providing restaurateurs a far less risky and capital intensive model for testing and scaling new concepts.
With so many new ways to start and scale a business, researchers at CloudKitchens wanted to see which cities in the U.S. have the most entrepreneurs. To find the most entrepreneurial cities, they analyzed U.S. Census Bureau data and calculated the percentage of all workers who are self-employed in either their own incorporated or unincorporated business.
In addition, CloudKitchens calculated median incomes for self-employed individuals and all workers, as well as the most overrepresented industry for entrepreneurs in each metro. The most overrepresented industry represents a disproportionately high rate of entrepreneurs within the metro relative to the national level. Here’s what they found:
Nationwide, there are close to 16 million self-employed individuals, representing around 10 percent of all workers. Interestingly, the median income for self-employed full-time individuals in the U.S. is only slightly higher than the median income for all workers ($50,000 vs. $48,000).
Self-employed individuals are found in every industry, but out of all workers, they make up the largest share of workers in the Other Services, Except Public Administration and the Agricultural, Forestry, Fishing and Hunting, and Mining sectors. Other non-public administration services include service providers such as mechanics and hairdressers. The Construction industry also has a large percentage of workers that are self-employed, while Manufacturing has the lowest share.
Just as self-employment varies by industry, it also varies by location. States with the largest share of self-employed individuals are geographically diverse; however, states in the Midwest generally have the lowest percentage of self-employed individuals.
At the metropolitan level, areas with the highest levels of self-employment are also spread out. However, similar to the state-level analysis, locations in the Midwest tend to have fewer self-employed individuals. To further refine the analysis, researchers grouped cities into the following cohorts based on population size:
Here are the most entrepreneurial cities in the U.S.:
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
Photo Credit: Alamy Stock Photo
The data used in this analysis is from the 2017 American Community Survey Public Use Microdata Sample (ACS PUMS). The percentage of workers that are self-employed, the number of people that are self-employed, the most overrepresented industry for the self-employed, median total income for the full-time self-employed, and median total income for all full-time employees were all derived from the survey.
For each metro, the most overrepresented industry for the self-employed was determined by comparing the metro-level concentration of self-employment for each industry to its respective national level concentration. The industry that had the largest percentage difference from the national concentration was reported as the most overrepresented industry—representing a disproportionately high concentration of self-employment within the metro relative to the national level.
Researchers grouped metros into the following cohorts based on population size:
Metros were then ranked by the percentage of workers that are self-employed.
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