Business startups are lagging in smaller counties

Starting a new rural business and keeping it running is becoming increasingly difficult. "From 2010 through 2014, U.S. counties with 100,000 or fewer residents combined to lose more businesses than they created—despite a growing national economy and a falling unemployment rate," Jim Tankersely reports for The Washington Post. "In the recovery beginning in 1992, by comparison, those counties created a third of the nation’s new businesses on net." (Post graphic)

"In the ’90s recovery, less-populated counties accounted for more than 1 in 4 new jobs in the country," Tankersely writes. "In the recovery beginning in 2002, that had fallen to 1 in 5. In this recovery, it is less than 1 in 10. Nearly 2 out of 3 rural counties lost businesses, on net, from 2010 to 2014. That is up from just over 2 in 5 counties in the early 2000s and just under 1 in 5 in the ’90s. The counties shedding establishments span the country and include almost every variety of rural areas, from farming and manufacturing communities in Missouri to coal-reliant swatches of Appalachia to coastal counties in the Pacific Northwest where the timber and fishing industries have dwindled."

According to data from a Brookings Institution's analysis of Moody’s Analytics the 100 largest metros in the U.S. recovered all the jobs lost—6 million total—during the Great Recssion, Tankersley writes. "The rest of the country, combined, was barely 300,000 jobs over its pre-recession peak."

One problem is that "the sort of businesses and jobs they used to create in economic expansions simply aren't appearing at the same rate anymore, particularly in blue-collar industries such as construction and manufacturing," Tankersley writes in a separate story. The other problem is that six metros—San Francisco, San Jose, New York, Boston, Los Angeles and Washington D.C.—account for two-thirds of all venture capital money. Most of those companies are high-tech startups. During the first five years of economic recovery 20 cities—mostly in Silicon Valley or New York City—combined for half of America's net new business formation.