ASU report ranks cities on ease of doing business

A new report and analysis on the relative ease of doing business in cities across North America shows that lowering barriers to entry makes a big difference for underrepresented founders.

Researchers at Arizona State University ranked cities in the U.S., Mexico and Canada on ease of doing business in its Doing Business North America report. They pulled from 12,000 data points and 111 variables to create 28 data indicators, including ease of starting a business, finding employees, getting electricity, paying taxes, land and space use and resolving insolvency.

Startup hubs such as San Francisco and San Jose, California, Boston, New York City and  Austin, Texas ranked low on the list. San Francisco ranked 64th, San Jose ranked 67th, Boston ranked 30th, New York City ranked 76th and Austin ranked 57th.

Making small changes in regulations could have a measurable impact on the number of businesses started by underrepresented founders, says Alicia Plemmons, an assistant professor of economics at Southern Illinois University Edwardsville. Particularly, making it easier for people to start a business could potentially have a large effect, she said.

If the Ease of Doing Business score (a value out of 100 potential points) in a city increased by one point, the rate of businesses led by people of color would increase by 3.8%. She defined the rate as the proportion of minority business owners (predicted using surnames classified by the Decennial Census Bureau Surname File) in the city relative to the total minority population within the city. This means that changing regulations, such as simplifying processes or reducing fees could increase the number of Black, Hispanic and Asian-led businesses in the U.S., Plemmons said.