Fact of the Month – October 2009

 

Resident Establishments

Based on a typology developed by the Lowe Foundation (for more information on this typology, click here), the number of resident establishments in the SRDC region increased 2.4 percent from 3.3 million in 1997 to 5 million in 2007. Only Florida and Georgia had an increase at or above the SRDC average. See Figure 1. In contrast, both non-commercial and non-resident establishments declined 0.1 percent and 2.3 percent respectively. During 2007, 86 percent of the resident establishments in the SRDC region were at stage 1; 13.2 percent at stage 2; 0.7 percent at stage 3; and 0.1 percent at stage 4.

Figure 1. Percent Change Resident Establishments, 1997-2007

Within the SRDC region, Georgia had the largest increase in resident establishments between 1997 and 2007 with 4 percent followed by Florida with 3.6 percent and Louisiana with 2.3 percent However, Florida had the largest increase in stage 1 businesses between 1997 and 2007 with 4.8 percent followed by Georgia with 4.6 percent and Kentucky with 3.2 percent. See table 1 for information on all states in the SRDC region.

Table 1. 1997-2007 Percent Change in Total Resident Establishments and by Stage

	Stage 1 (1-9 Emp.)	Stage 2 (10-99 Emp.)	Stage 3 (100-499 Emp.)	Stage 4 (500+ Emp.)	Resident Establishments
Alabama	2.49	-2.35	-0.12	-0.03	1.27
Arkansas	1.49	-1.40	-0.08	-0.01	-0.02
Florida	4.79	-4.52	-0.24	-0.02	3.58
Georgia	4.63	-4.32	-0.27	-0.04	4.03
Kentucky	3.17	-3.01	-0.14	-0.03	1.84
Louisiana	3.04	-2.87	-0.15	-0.03	2.21
Mississippi	2.36	-2.20	-0.13	-0.03	0.27
North Carolina	2.98	-2.70	-0.25	-0.03	1.84
Oklahoma	1.13	-1.14	-0.01	0.01	0.79
South Carolina	2.22	-2.06	-0.12	-0.04	1.74
Tennessee	2.46	-2.31	-0.12	-0.03	0.98
Texas	2.39	-2.27	-0.09	-0.02	1.53
Virginia	2.92	-2.72	-0.18	-0.02	1.87
SRDC	3.35	-3.15	-0.17	-0.03	2.40
United States	2.62	-2.46	-0.13	-0.03	1.62

Lowe Foundation Typology

According to a typology developed by the Lowe Foundation, establishments in a particular county can be divided into resident (stand-alone businesses or have headquarters in the same state), non-commercial (establishments like churches, universities, government offices, etc.), and non-resident (located in the area but with headquarters in a different state).

Further, resident establishments (considered indirect measure of entrepreneurship activity and is used in the economic gardening model) are divided into four different stages depending on the different issues companies face as they grow: stage 1 (1-9 employees), which usually are startups and are defining a market or developing a product or service; stage 2 (10-99 employees), where the business has a proven product and survival is no longer a daily concern; stage 3 (100-499), where businesses usually expand and broaden their geographic reach adding new products; and stage 4 (500 or more employees), the business is mature and dominates its industry.