Home Economy Economic Activity Report: R.I. 11th-worst state for new businesses

Report: R.I. 11th-worst state for new businesses

Updated at 3:22 p.m.

By

Jacquelyn Voghel

-

02/22/2024

SIMPLIFY — RHODE ISLAND ranked 40th out of 51 in Simplify LLC's 2024 index of the best and worst states to start a business, down from 24 last year. / COURTESY SIMPLIFY LLC

PROVIDENCE – Entrepreneurs in Rhode Island face more obstacles to success than their business peers in most other areas of the U.S., a recent study found. Simplify LLC, a small-business assistance publication, ranked the Ocean State 40th overall out of 50 states and Washington, D.C. in its 2024 “Best and Worst States to Start a

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PROVIDENCE – Entrepreneurs in Rhode Island face more obstacles to success than their business peers in most other areas of the U.S., a recent study found. Simplify LLC, a small-business assistance publication, ranked the Ocean State 40th overall out of 50 states and Washington, D.C. in its 2024 "Best and Worst States to Start a Business In" report, released last week. Rhode Island dropped six places from last year's index, where it placed 34th nationwide. The study drew from federal tax data and considered job creation, consumer spending, business growth, corporate taxes and inflation metrics, as well as whether college-educated workers are more likely to move or stay in-state. Among the factors studied, a low job creation rate dragged the Ocean State down in the index, with Rhode Island placing 50th in this category, at 8.5%. Simplify also assigned Rhode Island the highest rate of inflation since 2021, at 14.3%, and 48th in consumer spending growth, at -1%. While Rhode Island placed in the bottom quarter nationwide, the Ocean State's neighbors fared worse, with Massachusetts ranked 45th in the U.S. and Connecticut in 42nd. Despite the Ocean State's low ranking, new business filings have been on the rise since the COVID-19 pandemic: The R.I. Secretary of State recorded 13,880 business registrations in 2023, up from 13,418 in 2022. In 2019, the state noted 9,621 total registrations. Texas, Florida, Wyoming, Missouri and Delaware took the top five places, while New Hampshire, Mississippi, California, Washington, D.C., and Louisiana formed the bottom five. This year's results show that "the game has changed and business owners no longer need to be in New York City or Silicon Valley to succeed," Simplify stated in the report. For the third year in a row, a record-breaking number of entrepreneurs launched new businesses nationwide, the report also notes. (UPDATE: Adds details from R.I. Secretary of State's office) Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.