The Most Entrepreneurial States in America Revealed – Michigan Ranks 30th

Photo by Karola G

Article courtesy of iPostal1 

• Colorado takes the top spot with an entrepreneurial score of 60.3 out of 100, driven by strong startup survival and a leading pipeline of entrepreneurial ventures nationwide. 
• California comes in second, standing out as the nation’s leader in patent generation, while Massachusetts follows in third, thanks to its unmatched educational strength.
• West Virginia ranks as the least entrepreneurial state, with a score of just 15.8 out of 100. The state struggles most with education, where it sits firmly at the bottom of the rankings.

A new study by leading digital mailbox provider iPostal1 has revealed the most entrepreneurial states in America, with Colorado and California leading the way and Alabama and West Virginia falling to the bottom.

The analysis assessed all 50 states across three categories – public research & development, startups & patents, and education – measured through 17 metrics, including R&D funding, new business formation, startup job creation, patent generation, and educational achievement. Each state was then given an overall score out of 100 based on its performance across these areas.

Michigan’s findings:

Michigan places 30th overall with a score of 34.9. The state shows moderate strength in startup activity, where new businesses create an average of 3.64 jobs in their first year and 79.8% survive beyond year one.

Startup and patent performance sits at 36.4 out of 100, supported by steady business formation, though patent output remains relatively modest. Education outcomes are mixed, with 39% of adults holding a bachelor’s degree and 13.7% a graduate degree, contributing to an education score of 39.

While Michigan benefits from a solid industrial and manufacturing base, lower overall innovation intensity and middling education outcomes keep it from breaking into the top tier of entrepreneurial states.

The state places ahead of Indiana (33rd) and Wisconsin (34th), but behind Ohio (27th) and well below Illinois, which ranks 17th. Illinois’ stronger performance is driven by higher education outcomes and more consistent innovation activity, while Ohio edges ahead thanks to slightly stronger startup and patent metrics.

Top 10 most entrepreneurial states in America

Colorado takes the top spot with a score of 60.3. The state combines strong startup survival (81.9% active after the first year) with a highly educated workforce (45.9% of adults hold a bachelor’s degree or higher). With more than 2,000 new business applications per 100,000 residents, Colorado shows one of the strongest pipelines of new ideas in the country.

California comes second with a score of 59.2. It leads the nation in patent generation (119.77 per 100,000 people) and sees 82.6% of startups make it past year one. Significant public R&D spending, especially in energy and health, fuels its powerful tech ecosystem, even if fewer adults hold bachelor’s degrees (37%).

Massachusetts ranks third with a score of 55.6, standing out as an education powerhouse. Nearly half of adults hold a bachelor’s degree (46.6%), and more than one in five (21.3%) a graduate degree, the highest in the country. That talent pool supports strong patenting (114.52 per 100,000 people) and keeps 82.1% of startups alive.

Washington comes fourth with a score of 54.8. It has the highest startup survival rate in the U.S. (89.2%), along with a steady flow of patents (103.39 per 100,000 people). A strong talent base (39.5% bachelor’s degrees) helps the state turn research into thriving companies.

Florida places fifth with a score of 53.6. More than 0.61% of residents started a business, and over 2,700 business applications per 100,000 people were filed – the most in the country. While fewer residents hold degrees (34.3% bachelor’s), Florida leads the nation in startup activity.

Connecticut comes in sixth place, scoring 53.5 out of 100. In the state, more than 42% of adults hold a bachelor’s degree and 19% a graduate degree, backed by health research investment of $6.58 per capita. It also records strong patenting (82.86 per 100,000 people) and an 81.3% survival rate.

New Jersey is next, with a score of 53.2 and showing a similar profile: 43.7% of adults have a bachelor’s degree and 17.6% a graduate degree, alongside health R&D spending of $8.50 per capita. Startups also fare well, with 79.9% surviving year one.

New York comes in eighth with a score of 50.8. The state invests heavily in health R&D ($14.86 per capita) and has a strong talent pool (40% bachelor’s; 17.8% graduate degrees). Patent output is steady (51.87 per 100,000 people) and 79.2% of startups survive their first year, keeping New York a leading hub.

Georgia and Maine tie for ninth place, each scoring 46.5. In Georgia, new businesses create nearly six jobs in their first year (5.74) and file over 2,100 applications per 100,000 residents, besides holding a solid survival rate of 79.8%.

Maine leads the nation in public R&D investment, including $8.30 per capita in health and $7.25 in agriculture. Strong survival (82.9%) makes Maine a standout among smaller states.

Oregon rounds out the top ten with a score of 46.4. The state strikes a balance between innovation and stability, producing a strong flow of patents (89.06 per 100,000 people) while keeping most young businesses afloat (78.4% survival). With more than a third of adults holding a bachelor’s degree (36.7%), Oregon offers entrepreneurs both ideas and talent to build on.

The least entrepreneurial states in America

On the other hand, West Virginia comes last with a score of 15.8. Only 24.4% of adults hold a bachelor’s degree and just 9.6% a graduate degree. The state has very limited startup activity, with few new businesses being created and just 7.63 patents per 100,000 people, the lowest innovation output in the country.

Alabama is second-to-last with a score of 26.9. Despite some R&D investment ($2.10 per capita in health), just 28.6% of adults hold a bachelor’s degree and 11% a graduate degree. New business formation is limited, with only 0.26% of residents starting a business in 2021.

Iowa is third-to-last, scoring 28.7. New startups create on average just 2.84 jobs in year one, among the lowest in the country. Education levels are modest, with 32.6% of adults holding a bachelor’s and 11.3% a graduate degree, though survival is relatively strong (83.8%).

Hawaii is next, with a score of 28.8. It struggles with startup activity, scoring 21 out of 100, and has one of the lowest survival rates nationally (73.4%). While more residents hold degrees (35.1% bachelor’s; 13.7% graduate), business formation remains weak.

Mississippi rounds out the bottom five with a score of 29. Only 24.7% of adults hold a bachelor’s degree and 9.5% a graduate degree, while patent output is minimal (7.16 per 100,000 people).

Jeff Milgram, CEO and Founder of iPostal1, commented on the findings, “These results make it clear that entrepreneurship looks different in every corner of the country. Colorado thrives on resilience and education, while California drives forward with innovation at scale. There isn’t one single recipe for success – and that variety is exactly what makes the U.S. such a dynamic place for new businesses.

“What really stands out is the role of education. The states at the top of the list consistently have higher levels of degree attainment and stronger school systems, and that directly translates into more patents and healthier startups. It’s a reminder that building businesses starts with building talent.

“Alternatively, states that lag behind often face the same challenges – limited startup activity and lower educational outcomes. Without tackling those head-on, it’s tough for entrepreneurs in those regions to compete with peers in more dynamic states.”

Methodology:

The study drew on 17 measures of entrepreneurial activity across all 50 states from five authoritative sources: the Kauffman Indicators of Entrepreneurship, National Center for Science and Engineering Statistics (NCSES), United States Patent and Trademark Office (USPTO), National Center for Education Statistics (NCES), and the U.S. Census Bureau.

These measures covered:

Public research & development (per capita, 2023)

• Agriculture, energy, environment, health, transportation, other fields

Startups & patents

• Percentage of population starting new businesses (2021)
• Average jobs created by startups (2021)
• Percentage of startups active after the first year (2021)
• Annual patents granted (2016–2020, per 100,000)
• Business applications (2024, per 100,000)

Education

• Percentage of adults aged 25 with bachelor’s degree (2022)
• Percentage of adults aged 25 with graduate degree (2022)
• NAEP grade-8 math & reading scores (2024)
• ACT composite score (2023)
• SAT total score (2023)

Each metric was adjusted for population where relevant, normalized on a 0-10 scale, and weighted by importance. The combined results produced an overall score out of 100, which was then used to rank the states.

Complete entrepreneurial rankings for all 50 states