ANALYSIS OF BUSINESS FORMATION, SURVIVAL 

AND ATTRITION RATES OF NEW AND EXISTING 

FIRMS AND RELATED JOB FLOWS IN APPALACHIA

Prepared for:

Appalachian Regional Commission

1666 Connecticut Avenue, NW

Washington, DC 20235

Prepared by:

Brandow Company, Inc.

2601 Market Street suite 2

Camp Hill, PA 17011

717-909-6000 fax: 717-763-1232

www.brandow.com info@brandow.com

October 18, 2001

The Brandow Company
1

CONTENTS

I. Executive Summary...................................................................................................................2

I. Introduction...............................................................................................................................7

II. Methodology .............................................................................................................................9

III. Overview of Results...............................................................................................................14

IV. Area Summary Reports .......................................................................................................32

 (arranged alphabetically by Region, then LDDs, then MSAs)

V. Statistical Detail........................................................................................................ (attached)
2

Executive Summary

In the interest of enhancing its understanding of the actual experience of entrepreneurs 

and existing businesses in the Appalachian Region, the Appalachian Regional 

Commission (ARC) commissioned a longitudinal economic analysis of business 

formation, survival and attrition rates for new and existing firms. Detail is provided by 

industry and employment size classes for the region, its Local Development Districts 

(LDDs), and major metropolitan areas.

The Brandow Company’s longitudinal methodology includes the ability to track 

individual firms and business demographic categoriesincluding industries, startup and 

survival rates, years of operations, as well as sales and employment.

The report provides economic vitality measures for the Appalachian Region, the seventyone Local Development Districts, and forty-four metropolitan areas linked to various 

LDDs.

The full report includes detail broken out by industry, including:

Analysis of Existing Businesses

• 1996-2001 overall business survival, and retained firms rates compared to the 

1996 pool;

• 1996-2001 retained business sales vitality;

• 1996-2001 retained business job vitality, including change in average 

employment and job replenishment rates (net change in jobs due to expansion 

and jobs lost due to failures);

• 1996 average and current retained business sales per employee by industry;

• 1996-2001 business out-migration levels.

Analysis of Startups

• 1996-2001 business formation rates;

• 1996-2001 startup survival and retained firm rates from the 1996 pool;

• 1996-2001 retained startup business sales vitality;

• 1996-2001 retained startup business job vitality, including change in average 

employment and job replenishment rates;

• 1996 average and current retained startup sales per employee;

Analysis of High Growth Firms by Firm Size

• number and employment size of high growth firms (relative measure by 

subregion and breakout by five employment-size classes).

Benchmarks in each of the above categories are presented in the form of an index using 

the US as yardstick (e.g., U.S.=1.00), allowing for easy comparisons of each LDD and 

metro area with US and Regional results. 
3

Key Findings for The Appalachian Region

As the conventional wisdom suggests, Appalachia has made some strides, but remains 

caught in a cycle of low levels of entrepreneurship, low growth among existing firms, and 

a continued over-reliance on branch facilities as economic engines. In aggregate, the 

Region exhibited high business retention rates, but the highest retention rates seemed to 

occur most often in low-growth areas. In addition, the overall positioning of retained 

firms, as indicated by the sales per employee index, is fully 6 percent below the US 

average.

Seventy-two of 73 major industries have retention rates at or above the US industry 

average. Only coal mining registered a below average five-year retention rate, probably 

due to the relatively high concentration of coal-mining in the region and its steady decline 

nationally. However, it is misleading to assess the Region's stellar retention performance 

alone. For instance, only 19 major industries show job vitality patterns among surviving 

firms that are higher than US trends, and only a handful of these are in locally controlled 

industries. Only a dozen industries have sales per employee rates among surviving firms 

that top their peers across the US. Thus, the Region is relatively weakly positioned in 

many industries. Regional technology industries lag quite seriously in most retained firm 

vitality measures.

On the positive side of the Region’s performance, fewer than 400 firms of all sizesless 

than 0.05 percent migrated outside the region over the five years studied, about on par 

with the three-year US interstate average.

Startups in the region tended to survive at slightly higher rates than the US average. 

Surviving startups also tended to add jobs at a very good clip, but sales per employee 

among surviving startups is low. Most importantly, startup activity ratesthe measure of 

raw Regional entrepreneurial activityare 13 percent below the national average.

Startup activity rates are above average in only thirteen of seventy-three major industries. 

The leaders include several manufacturing industries critical to Regional vitality: primary 

metals, fabricated metal, transportation equipment, plastics, and furniture. Startups in the 

technology-oriented instrument group are just under US norms. Business Services 

startups (including computer-related services) run 12 percent below US trends, while 

communications starts the national leaderare 27 percent below par. Among 

technology startups Appalachia is falling further behind. Only five significant technology 

industries indicate higher than average startup rates.

Startup rates showed strength in 27 detailed (4-digit SIC) manufacturing industries that 

had at least fifty startups on a Region-wide basis. Startup activity is impressively high in 

several value-added wood industries, including the high performing millwork, wood 

cabinets and wood furniture. The strong northern plastics industry outperforms the 

national startup activity rate by 18 percent. And a variety of heavy industries, including 

steel mills, fabricated structural metal, sheet metal and auto components also outperform 

the US average. In spite of very large existing concentrations, tool and die startup activity 

is only 6 percent under the US pattern.
4

While the Region falls 10 percent behind US patterns in high growth firms by 

employment measures, performance is better than anticipated. Among the smallest class 

measured (firms which began with fewer than five employees and grew to more than ten 

over five years), regional performance trailed national patterns by only 5 percent. Among 

larger firms, regional ratings lagged US rates by 11 percent to 18 percent. 

Key Findings for LDDs

In order to assess how well the individual districts performed, a classification scheme was 

developed based on four performance indices outlined in the table below. Twenty 

Districts could be classified according these “vitality quadrants”. All other Districts fell 

between these quadrants, most between the Low Vitality and Low-Moderate Vitality 

Patterns. All three high vitality Districts are linked to sizeable MSAs.

ÿ High Vitality Patterns: Sales per Employee >0.85, all other measures indexing 

over 0.95. Three districts (AL 1E, GA 2C, TN 11B).

ÿ High-Moderate Vitality Patterns: Startup >0.95; High Growth >0.79<0.95; SPE 

>0.85; Retention >1.00. Two Districts (GA 2A, GA 2B).

ÿ Low-Moderate Vitality Patterns: Startup >0.79<0.95; High Growth >0.95; SPE 

>0.85; Retention >1.00. Three Districts (KY 3B, SC 10A, TN 11C).

ÿ Low Vitality Patterns: Startup <0.80; High Growth <0.80; SPE <0.80; Retention 

>1.00. Twelve Districts (KY 3I, MS 5D, MS 5E, NY 6B, PA 9C, PA 9D, TN 

11D, VA 12B, VA 12C, VA 12E, VA 12F, WV 13H).

A summary index was also developed, averaging four vitality measures, including the 

overall retention index, the startup activity index, the aggregate high growth firm index 

and the retained firm sales per employee index. The summary attempts to integrate 

stability, new growth, economic engines and overall positioning of each area relative to 

High Vitality Patterns

High Startup Activity

Strong Hi-Growth Index

High Sales Per Employee

In-Range Retention 

Hi-Moderate Vitality Patterns

High Startup Activity

Low-Moderate Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low-Moderate Vitality Patterns

Low-Moderate Startup Activity

Strong Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low Vitality Patterns

Low Start Activity

Low-Moderate Hi-Growth Index

Low-Moderate Sales Per Employee

High Retention 

High Vitality Patterns

High Startup Activity

Strong Hi-Growth Index

High Sales Per Employee

In-Range Retention 

Hi-Moderate Vitality Patterns

High Startup Activity

Low-Moderate Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low-Moderate Vitality Patterns

Low-Moderate Startup Activity

Strong Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low Vitality Patterns

Low Start Activity

Low-Moderate Hi-Growth Index

Low-Moderate Sales Per Employee

High Retention 
5

national patterns. The indices were averaged, yielding a final, unweighted rate which can 

be compared to the standard US index (US= 1.00). 1

Most LDDs and MSAs did not do well in the Summary Index. Only four LDDstwo of 

them in Georgia and linked to the booming Atlanta MSAscored above the national 

average. 

Twenty-one LDDs (37 percent) scored within 10 percent of the national score, as did the 

Region itself. But eleven LDDs (15 percent) showed a summary index more than 20 

percent below the national average, and another 33 (46 percent) scored 11-20 percent 

below average. The lowest rated LDDs tended to be clustered: five in Virginia, two in 

Mississippi, two in Alabama. The median score of the seventy-one LDDs was 12 percent 

below the national average.

Policy Implications

1. Retention programs and resources should be targeted.

High regional retention rates may reflect a focus in most Districts on economic 

maintenance rather than on spurring vitality. A focus on service delivery to core local 

industry clusters, high vitality industries, and high growth firms would pay off much 

more handsomely than broad-ranging retention programs.

2. Focus on the Regional lag in entrepreneurial activity.

The lag in entrepreneurial activity is clearly Appalachia’s weakest link, one exposed with 

chilling clarity by this analysis. This problem is truly region-wide and cuts across all sorts 

of industries, core and otherwise.

3. Branch facilities create entrepreneurial opportunities that should be exploited.

While many supporters of the Region are aware of the mixed blessings of branch 

facilities, some of the Region’s booming Districts owe much of their good fortune to the 

recent development of large branches. However, the task of identifying and nurturing 

entrepreneurial startup opportunities associated with core branch facilities has received 

relatively less attention as a development strategy.

4. Appalachian technology industries need targeted assistance for the Region to 

catch up.

 

1

 Readers who wish to assign greater or lesser weights to various indices will 

conclude with different final scores. The consultant’s view would be to downplay 

the value of the retention index and cap the value of any given measure.
6

The region hosts many strong technology firms and industries. Nonetheless, many 

technology industries lag behind national vitality indices. Startup activity rates in almost 

all technology sectors (strong and weak, plentiful and scarce) are uncomfortably low. 

More needs to be done to help existing firms advance, and new ones to start up and 

flourish.

5. Metro areas are irrevocably linked.

District economies appear to be increasingly linked to nearby MSAs. In most cases, 

Districts should take their cues for attraction and startup efforts from their MSA 

neighbor, which are outperforming District economies.

6. Business migration is not a major issue.

In general, the Region and its Districts do not exhibit major problems with business outmigration. Indeed, most districts were at or below the average for business out-migration. 

While new branch attraction (not analyzed in this report) is a larger issue, non-branch 

business out-migration from ARC Districts is rarely a problem.
7

I. Introduction

In the interest of enhancing its understanding of the actual experience of entrepreneurs 

and existing businesses in the Appalachian Region, the Appalachian Regional 

Commission (ARC) commissioned a longitudinal analysis of the trends in business 

startups, survival rates, and the attrition of new and existing establishments by industry 

and establishment. The analysis provides additional detail by establishment, industry and 

employment-size for the region, its Local Delivery Districts and major metropolitan 

statistical areas (MSAs).

The project incorporates the use of proprietary databases derived from private sector 

credit reporting services.2 The Brandow Company’s longitudinal methodology includes 

the ability to track individual firms and business demographic categoriesincluding 

industries, startup and survival rates, years of operations, as well as sales and 

employment.

This report develops economic vitality measures for the Appalachian Region, the 71 

Local Development Districts (LDDs), and 44 metropolitan areas linked to various LDDs. 

The following analytical “package” was developed for each area with industry detail, 

including:

Analysis of Existing Business Establishments

• 1996-2001 overall business survival and retained firms rates from the 1996 

pool;

• 1996-2001 retained business sales vitality;

• 1996-2001 retained business job vitality, including change in average 

employment and job replenishment rates (net job changes due to expansion 

and jobs lost to failures);

• 1996 average and current retained business sales per employee by industry;

• 1996-2001 business out-migration levels.

Analysis of Startups

• 1996-2001 business formation rates;

• 1996-2001 startup survival and retained firm rates from the 1996 pool;

• 1996-2001 retained startup business sales vitality;

• 1996-2001 retained startup business job vitality, including change in average 

employment and job replenishment rates;

• 1996 average and current retained startup sales per employee.

Analysis of High Growth Firms by Establishment Size

• number and employment size of high growth firms (relative aggregate 

measure by LDD and breakout by five employment-size classes).

 

2

The analysis in this report is drawn from a variety of raw data sources, including Dun and Bradstreet, Info 

USA and government publications including County Business Patterns, none of which are responsible for 

either final statistics or conclusions drawn.
8

Benchmarks in each category are presented in the form of an index using the US as a 

yardstick (e.g., US=1.00), allowing for easy comparisons of each LDD and metro area 

with US and Regional results.

The report includes:

• a detailed discussion of methodology;

• a narrative of Regional performance and policy implications indicated by the 

analysis;

• summary findings for each of the 116 areas benchmarked against US business 

vitality patterns, including an indexed chart of key measures, statistical tables and a 

brief text discussion of each area;

• detailed statistical appendices of the data analyses, including a query-capable 

electronic database.
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II. Methodology

The Longitudinal Analysis: Data and Methodology Issues

Overview

The databases which form the raw source of information utilized for the longitudinal 

analyses are collected by the nation's most acknowledged business reporting agencies. 3 

The data is extremely timely (time lags are estimated at 0-9 months), highly detailed, 

devoid of most confidentiality restrictions and are regularly updated. The analyses are not

based on computer models or historical projectionsthey are developed from financial 

and informational reports from 11 million individual firms at any given time. The 

Brandow Company’s proprietary methodology creates links between the databases in a 

time series to track firms or any category of firms by location, industry, employment, 

sales and other criteria.

The overall coverage of the databases ranges from about 9.8 million private sector firms 

in 1996 to more 11.7 million firms in 2001. These totals are comparable to the numbers 

of firms covered by County Business Patterns. Data on approximately 17 million 

different firms was analyzed over the five-year time series. 

Specific information on some firms is lacking in the database. While 100 percent datafield coverage is desirable for analysis purposes, the greatest value of the analysis rests in 

discerning patterns of activity from the large samples used to develop the analysis. 

Unidentified data components in the databases include:

• unidentified employment: 3.7% of all business facilities

• unidentified sales: 19.6% of all business facilities

 5.2% of all non-branch business facilities **

• both employment and sales unidentified: 3.1% of all business facilities

• both employment and sales unidentified: 1.9% of all non-branch business facilities **

** note: As discussed below, analysis of startup and sales-related measures exclude 

branch facilities in order to create clean data sets. 

Confidentiality Restrictions: Although some data segments are withheld by individual 

reporting firms, the databases are not subject to most confidentiality restrictions such as 

those that commonly apply to government business databases. Detailed information on 

firms that occupy dominant roles in an area economy are included, as are sole 

proprietorships and industries of limited scale. 

Business Sales Reporting: Determination of sales volume through longitudinal analysis 

may be distorted by centralized revenue reporting procedures of multi-site firms (but not 

 

3

 The analysis in this report is drawn from a variety of raw data sources, including Dun and Bradstreet, Info 

USA and government publications including County Business Patterns, none of which are responsible for 

either final statistics or conclusions drawn.
10

franchises). This common reporting method distorts sales figures for multi-site firms by 

indicating headquarters as the source of all revenue while none is attributed to branch 

facilities. The longitudinal analysis in this report minimizes this concern by basing sales 

and sales growth figures on single-site establishments, which comprise 86 percent of the 

firms in the databases. Some distortions can occur, however, as a result of faulty 

reporting and occasional erroneous classification of business facilities as single-site 

firms.

Business Migration: “survivors” vs. “retained”: Firms can survive and grow without 

being retainedsimply by moving out of the jurisdiction under analysis. Filters were 

developed for each geographic area to assure that retention, sales and employment data 

reflect only firms that remain in the location under review. This methodology identifies 

sets of “retained survivors”. The screening procedure also revealed the percentage of outmigrant firms from each area, which is reflected in the final tabulation and text discussion 

of each area. Business migration rates tend to be low in rural areas, but more significant 

in metro and adjacent counties and Local Development Districts.

Branch facility classification: The methodology employed for the project sorts out 

branch from single-site and headquarters facilities. This delineation is particularly useful 

for two reasons. First, it permits the development of minimally distorted sales analyses of 

single-site firmsan issue in the Retention and Startup vitality analyses of sales, retained 

sales, sales change, and sales per employee. Second, in the business formation analysis 

and analysis of startup activity, survival and growth, this classification of business 

facilities allows the analyst to target true entrepreneurial activity rather than the 

development of facilities originated by established outside firms. One should note, 

however, that the elimination of headquarters and branch facilities from sales-related 

measures and of branch facilities from startup activity analysis may depress the vitality 

indices of areas with large and/or vigorous business populations of either or both.

Data timeliness: The data employed for this report used databases nominally covering 

the first quarter of 1996 to the first quarter of 2001. Reporting time lags indicate that the 

actual five years of activity analyzed was from the last half of 1995 to the last half of 

2000. 

Data accuracy: As is the case with any database this large, some errors are inevitable. 

The analyses are based on information supplied largely by business owners and 

representatives to private credit reporting services. That information is regularly checked 

through phone surveys, balance sheet reviews, and information from suppliers and 

creditors. Survival rates assume that the discontinuation of a facility's presence among the 

credit reporting databases reflects the discontinuation of operations of that facility. In 

addition, faulty sales or employment reports, or the misclassification of business facilities 

as single site rather than branch or headquarters, could distort the analysis, with 

significant impact on smaller jurisdictions.

Measures Used for the Analysis of Existing Business Establishments

• Overall business retention rates: Establishments identified in each of the 117 

geographic areas were tracked for five years through the end of 2000. Establishments still 
11

operating after five years were identified as a percent of the original population. This 

created a set of “survivor” firms. Filters were then applied to exclude out-migrant 

surviving firms. The resulting Retention Rate was indexed based on the US norm.

• Retained firm sales vitality: Average sales of single site establishments for which 

sales data was reported in the first analysis year were tracked through the through the end 

of 2000. Filters were applied to exclude out-migrant surviving firms. Average sales of 

firms still operating after five years were compared to sales of the original “snapshot” to 

ascertain the change in average sales volume of retained firms. The resulting Retained 

Firm Sales Vitality Rate was indexed based on the US norm.

• Retained firm job vitality: Average employment of firms for which sales data was 

reported in the first analysis year was tracked through the end of 2000. Filters were 

applied to exclude out-migrant surviving firms. Average employment of firms still 

operating after five years was compared to average employment of the original 

“snapshot” to ascertain the change in average employment supported by retained firms. 

The resulting Retained Firm Job Vitality Rate was indexed based on the US norm.

• Retained firm job replenishment: Total employment of firms in the first analysis 

year was tracked through the end of 2000. Filters were applied to exclude out-migrant 

surviving firms. Total employment of firms still operating after five years was compared 

to total employment of the original “snapshot” to ascertain the net change in employment 

due to job expansion of retained firms and job losses due to failures among firms in each 

jurisdiction and industry. The resulting Retained Firm Job Replenishment Rate was 

indexed based on the US norm. 

• Retained firm sales per employee: As a measure of industry performance, sales per 

employee rates for retained firms were developed for each industry and location and 

indexed based on the US norm. Filters were applied to exclude out-migrant surviving 

firms. This index was used as a measure of stability and positioning, rather than growthrelated vitality.

Measures of Entrepreneurial Activity, Survival and Growth

Analysis in this phase covers only business facility startups which are not branches of 

multi-site firms. Consequently, this analysis is focused on true entrepreneurial activity. 

Analyses were broken out at the specific industry level for all locations.

• Startup activity (entrepreneurial business formation) rates: Non-branch starts 

(defined as single-site firms or headquarters with one year or less of operation) were 

tracked through the end of 2000. Screens were developed to assure non-duplication of 

startup activity. Retained startups were summed and compared to the total current in 

January 2001 for the non-branch business population in each area for which an age could 

be identified (about 82% of the sample). The resulting percentage constituted the 

entrepreneurial business formation rate, which was indexed based on the US norm.

• Startup retention rates: Non-branch starts in the first analysis year were tracked for 

five years through the end of 2000. Firms still operating after five years were identified as 
12

a percent of the original startup population. Filters were applied to exclude out-migrant 

surviving firms. The resulting Startup Retention Rate was indexed based on the US norm.

• Retained startup sales vitality: Average sales of non-branch starts for which sales 

data was reported in the first analysis year were tracked for five years through the end of 

2000. Filters were applied to exclude out-migrant surviving firms. Average sales of firms 

still operating after five years were compared to sales of the original “snapshot” to 

ascertain the change in average sales volume of retained firms. The resulting Retained 

Startup Sales Vitality Rate was indexed based on the US norm.

• Retained startup job vitality: Average employment of non-branch starts in the first 

analysis year for which sales data was reported in the first analysis year were tracked for 

five years through the end of 2000. Filters were applied to exclude out-migrant surviving 

firms. Average employment of firms still operating after five years was compared to 

average employment of the original “snapshot” to ascertain the change in average 

employment supported by retained firms. The resulting Retained Startup Job Vitality 

Rate was indexed against other analyzed locations and industries based on the US norm.

• Retained startup job replenishment: Total employment of non-branch starts in the 

first analysis year was tracked through the end of 2000. Filters were applied to exclude 

out-migrant surviving firms. Total employment of firms still operating after five years 

were compared to total employment of the original “snapshot” to ascertain the net job 

change due to expansions among retained firms and losses due to failures among startups 

in each jurisdiction and industry. The resulting Startup Job Replenishment Rate was 

indexed based on the US norm. This rate was essentially used as a “check” against the 

Startup Job Vitality Rate.

• Retained startup sales per employee: As a measure of industry performance, sales 

per employee rates developed for retained firms were developed for each industry and 

location and indexed based on the US norm. Filters were applied to exclude out-migrant 

surviving firms.

Employment Class Analysis: Survival and Growth: 

Six employment-size classes were analyzed for each location:

ß Class I: Firms beginning the analysis period with fewer than five employees, and 

ending the analysis period with at least ten employees; 

ß Class II: Firms beginning the analysis period with fewer than ten employees, and 

ending the analysis period with at least twenty-five employees; 

ß Class III: Firms beginning the analysis period with fewer than twenty-five 

employees, and ending the analysis period with at least fifty employees; 

ß Class IV: Firms beginning the analysis period with fewer than fifty employees, 

and ending the analysis period with at least one hundred employees; 
13

ß Class V: Firms beginning the analysis period with fewer than one hundred 

employees, and ending the analysis period with at least two hundred and fifty 

employees.

Aggregate High Growth Rate. An aggregate high growth rate was developed for each 

location to measure the total number of high growth firms. Since some firms qualified for 

multiple Classes, the aggregate number of high growth firms in some areas differs from 

the sum of the high growth firms in the individual class breakouts (I-V above).

Employment class high growth rates: Firms falling in each original category were then 

tracked for each location. An analysis of high growth firms was developed for each class 

in each area and indexed against the US rate. The resulting measures help indicate the 

economic base and strength of economic engines in each location.

Using the Measures

The importance of various vitality measures varies widely depending on a number of 

considerations, including:

• The preferences of the reader, whose interests may be limited to one or two 

measures;

• The characteristics of the analyzed location, where the scale or condition of an 

industry may elevate the importance of certain measures, distort others and render 

some insignificant due to the number of firms analyzed for a given index;

• The importance of firms in a given area that may be excluded from the 

development of certain measures; for example, of branch facilities excluded from 

sales-related analyses

• The relative value of the selected time series to a given area; for example, this 

time series would favor areas that generally experienced higher retained firm 

vitality from a 1996 beginning point, rather than an area which experienced 

intensified vitality beginning after that mark.

Given these and other problems inherent in assessing the importance of any measures, 

four indices were selected as summary measures for the brief reports on each area 

covered by this report:

• retention (stability); 

• entrepreneurial startup activity;

• concentrations of high growth firms (dynamism), and; 

• current sale per employee index for firms retained from 1996 (positioning).

These measures were chosen not because they were deemed most applicable to each and 

every area, but because they integrated a series of indices that reflected stability, 

competitive positioning and dynamic economic activity. 
14

Despite the dangers of potential oversimplification inherent in such summary scores, and 

distortions caused by varied industry mixes, these provide the best thumbnail sketch. The 

author’s view is that growth engineshigh growth firms and entrepreneurshipare at 

the heart of this analysis. The retention rates, and corresponding measures of retained 

firm vitality (aside from high growth concentrations) are secondary measures of vitality 

for most areas. Because of the implications for future growth, we suggest that the startup 

activity rate is paramountand it is precisely here that Appalachia falls short.

It would also be wise to point out that, especially in most LDD-sized jurisdictions, 

measures based on average sales or employment figures are subject to undue influences 

due to the vigor or weaknesses of large firmsor by distortions caused by faulty data 

reporting. It is for this reason that no single measure, especially at industry levels, should 

be considered in isolation. To some degree, the measures used in the report have “crosschecks” built in: the job vitality rate is balanced by the job replenishment rate, and; the 

sales vitality rate is balanced by the sales per employee rate. As readers of the area briefs 

will quickly see, retention rates may reflect stability or moribund performance; a look at 

the vitality factors is necessary to discern the difference.

III. Overview of Results

Summary Index of the Districts

Since summary ratings always make assumptions about how to weight scores and which 

scores to include, they are always open to question. Despite their weaknesses, however, 

summary measures create a useful quick barometer of performance. 

As readers review the summary measures for individual areas, the Quadrant Vitality 

Approach shown in Figure 1 provides a guide for interpreting the summary scores.

Figure 1. Vitality Quadrant

High Vitality Patterns

High Startup Activity

Strong Hi-Growth Index

High Sales Per Employee

In-Range Retention 

Hi-Moderate Vitality Patterns

High Startup Activity

Low-Moderate Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low-Moderate Vitality Patterns

Low-Moderate Startup Activity

Strong Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low Vitality Patterns

Low Start Activity

Low-Moderate Hi-Growth Index

Low-Moderate Sales Per Employee

High Retention 

High Vitality Patterns

High Startup Activity

Strong Hi-Growth Index

High Sales Per Employee

In-Range Retention 

Hi-Moderate Vitality Patterns

High Startup Activity

Low-Moderate Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low-Moderate Vitality Patterns

Low-Moderate Startup Activity

Strong Hi-Growth Index

Moderate Sales Per Employee

In-Range Retention 

Low Vitality Patterns

Low Start Activity

Low-Moderate Hi-Growth Index

Low-Moderate Sales Per Employee

High Retention 
15

Based on these summary scores, 20 LDDs could be classified. All other LDDs fall 

between these quadrants, most between the Low Vitality and Low-Moderate Vitality 

Patterns. Note that all three high vitality Districts are liked to sizeable MSAs:

ÿ High Vitality Patterns: Sales per Employee >0.85, all other measures indexing 

over 0.95. Three districts (AL 1E, GA 2C, TN 11B).

ÿ High-Moderate Vitality Patterns: Startup >0.95; High Growth >0.79<0.95; Sales 

per Employee >0.85; Retention >1.00. Two Districts (GA 2A, GA 2B).

ÿ Low-Moderate Vitality Patterns: Startup >0.79<0.95; High Growth >0.95; SPE 

>0.85; Retention >1.00. Three Districts (KY 3B, SC 10A, TN 11C).

ÿ Low Vitality Patterns: Startup <0.80; High Growth <0.80; SPE <0.80; Retention 

>1.00. Twelve Districts (KY 3I, MS 5D, MS 5E, NY 6B, PA 9C, PA 9D, TN 

11D, VA 12B, VA 12C, VA 12E, VA 12F, WV 13H).

As Table 1 below shows, a summary index was also developed, averaging a range of 

vitality scores, including the overall retention index, the startup activity index, the 

aggregate high growth firm index, and the retained firm sales per employee index. The 

summary index attempts to provide an integrated measure of stability, new growth, 

economic engines and overall positioning of each area relative to national patterns. To 

develop summary scores, these four indices were summed and divided by four, yielding a 

final, unweighted rate which can be compared to the standard US index (US= 1.00). The 

summary rating includes vitality measures in which the Region is traditionally weak (i.e., 

entrepreneurial activity) but also its strengths (overall business establishment retention).4

Generally LDDs did not do well in the Summary Index. Only four LDDstwo of them 

in Georgia and linked to the booming Atlanta MSAscored above the national average. 

A third, AL 1E, is in the heart of the Birmingham MSA, another growth center. And the 

last, in West Virginia, is buoyed by high retention and sales per employee rates, both of 

which are heavily influenced by industry mixand which in this case obscure much 

weaker retention vitality among most industries, and entrepreneurial activity in general.

Twenty-one LDDs (37 percent) scored within 10 percent of the national score, as did the 

Region itself. But eleven LDDs (15 percent) showed a summary index more than 20 

percent below the national average, and another 33 (46 percent) scored 11-20 percent 

below average. The lowest rated LDDs tended to be clustered: five in Virginia, two in 

Mississippi, two in Alabama. The median score of the seventy-one LDDs was 12 percent 

below the national average.

In each of the following tables, as well as in the indices included in the Section IV briefs 

on each LDD, negative indices are shown as zero values.

 

4

 Naturally, readers who wish to assign greater or lesser weights to various indices will conclude with 

different final scores. The consultant’s bias would be to downplay the value of the retention index and cap 

the value of any given measure.
16

Area Summary Index AggHGIndex Retention Index SPEIndex Start Rate Index

Appalachian Region 0.95 0.90 1.08 0.94 0.87

ARC Alabama 1A 0.81 0.56 0.94 0.88 0.84

ARC Alabama 1B 0.95 0.95 1.07 0.96 0.83

ARC Alabama 1C 0.95 0.77 0.99 0.99 1.04

ARC Alabama 1D 0.95 0.95 1.03 0.89 0.94

ARC Alabama 1E 1.05 1.02 1.00 1.11 1.08

ARC Alabama 1F 0.88 0.73 1.01 0.86 0.9

ARC Alabama 1H 0.75 0.55 0.70 0.80 0.96

ARC Alabama 1I 0.72 0.51 0.85 0.65 0.87

ARC Georgia 2A 0.96 0.91 1.02 0.88 1.03

ARC Georgia 2B 0.99 0.89 1.03 0.90 1.14

ARC Georgia 2C 1.05 1.11 1.00 0.97 1.13

ARC Georgia 2D 1.20 1.19 0.86 1.33 1.43

ARC Georgia 2E 0.89 0.80 1.10 0.81 0.85

ARC Georgia 2F 0.98 1.09 1.08 0.97 0.79

ARC Kentucky 3A 0.87 0.79 1.14 0.99 0.57

ARC Kentucky 3B 0.96 1.02 1.09 0.92 0.8

ARC Kentucky 3C 0.92 0.85 1.16 0.79 0.86

ARC Kentucky 3D 0.89 0.85 1.14 0.81 0.77

ARC Kentucky 3E 0.86 0.88 0.96 0.90 0.71

ARC Kentucky 3F 0.83 0.90 1.07 0.71 0.65

ARC Kentucky 3H 0.84 0.77 1.05 0.82 0.73

ARC Kentucky 3I 0.80 0.78 1.06 0.71 0.63

ARC Kentucky 3J 0.83 0.36 1.09 1.43 0.42

ARC Maryland 4A 0.99 0.96 1.12 1.08 0.78

ARC Mississippi 5A 0.83 0.68 0.99 0.78 0.88

ARC Mississippi 5B 0.87 0.83 1.02 0.88 0.74

ARC Mississippi 5C 0.88 0.81 1.13 0.73 0.86

ARC Mississippi 5D 0.68 0.28 1.10 0.57 0.76

ARC Mississippi 5E 0.70 0.32 1.04 0.72 0.7

ARC New York 6A 0.84 0.86 1.11 0.80 0.6

ARC New York 6B 0.82 0.79 1.07 0.70 0.72

ARC New York 6C 0.82 0.83 1.06 0.79 0.59

ARC North Carolina 7A 0.84 0.80 1.08 0.67 0.82

ARC North Carolina 7B 0.90 0.96 1.06 0.78 0.81

ARC North Carolina 7C 0.88 0.79 1.12 0.88 0.71

ARC North Carolina 7D 0.89 0.95 1.11 0.74 0.77

ARC North Carolina 7E 0.87 0.90 1.09 0.78 0.71

ARC North Carolina 7I 0.90 0.95 1.00 0.89 0.76

ARC Ohio 8A 0.85 0.85 1.12 0.73 0.7

ARC Ohio 8B 0.86 0.92 1.16 0.72 0.64

ARC Ohio 8C 0.97 1.10 1.19 0.98 0.62

ARC Pennsylvania 9A 0.90 1.01 1.19 0.79 0.61

ARC Pennsylvania 9B 0.90 0.97 1.20 0.82 0.62

ARC Pennsylvania 9C 0.72 0.47 1.14 0.79 0.49

ARC Pennsylvania 9D 0.83 0.74 1.13 0.79 0.64

ARC Pennsylvania 9F 0.88 0.87 1.17 0.91 0.55

ARC Pennsylvania 9G 0.83 0.78 1.16 0.81 0.57

ARC Pennsylvania 9H 0.96 0.99 1.12 1.07 0.65

ARC South Carolina 10A 0.96 0.96 1.03 0.90 0.94

ARC Tennessee 11A 0.89 0.90 1.15 0.76 0.74

ARC Tennessee 11B 0.98 0.99 1.05 0.91 0.97

ARC Tennessee 11C 0.85 0.84 1.11 0.76 0.69

ARC Tennessee 11D 0.83 0.72 1.10 0.75 0.73

ARC Tennessee 11E 0.91 0.90 1.04 0.77 0.94

ARC Virginia 12A 0.79 0.55 0.99 0.82 0.78

ARC Virginia 12B 0.74 0.75 0.99 0.59 0.61

ARC Virginia 12C 0.71 0.49 1.11 0.67 0.55

ARC Virginia 12D 0.97 0.97 1.09 1.06 0.77

ARC Virginia 12E 0.70 0.37 1.03 0.74 0.67

ARC Virginia 12F 0.72 0.28 1.26 0.61 0.72

ARC West Virginia 13A 0.83 0.80 1.10 0.67 0.76

ARC West Virginia 13B 0.89 0.84 1.06 0.89 0.75

ARC West Virginia 13C 0.99 0.99 1.03 1.09 0.85

ARC West Virginia 13D 0.85 0.87 1.12 0.72 0.7

ARC West Virginia 13E 0.86 0.80 1.10 0.80 0.75

ARC West Virginia 13F 0.90 1.10 1.01 0.77 0.71

ARC West Virginia 13G 0.86 1.02 1.12 0.68 0.61

ARC West Virginia 13H 0.78 0.65 1.15 0.73 0.6

ARC West Virginia 13I 0.83 0.92 0.98 0.56 0.84

ARC West Virginia 13J 0.94 1.19 1.12 0.78 0.68

ARC West Virginia 13K 1.04 1.10 1.13 1.23 0.68

T-1. Summary Vitality Index
17

Retention: As the results in Table 2 indicate, the region’s LDDs did best in the retention 

vitality analysis, primarily in the measure of raw retention. In the most vital areas, higher 

retention scores can indicate stability in the face of ongoing dynamism. But in many 

weak Districts, high retention rates are largely due to the tendency of low and modest 

growth areas to retain larger numbers of firms, probably because of lower competitive 

pressures from new market entries. This conclusion also aligns with the low levels of

entrepreneurial vitality identified in the Region.

In the overall retention measure, the Region’s LDDs ranged from a low of a 35 percent 

five-year retention rate in AL 1H to a high of 63 percent in VA 12F. Fifty-two of the 

Region’s LDDs (73 percent) registered retention rates at or above the US average. 

Twenty-eight LDDs (39 percent) had scores at least 10 percent higher than the national 

rate. 

Out-migration: A secondary factor accounting for the high retention rates is the low level 

of business out-migration (relocation) found in most LDDs. Over the five-year analysis 

period, forty-five LDDs (over 63 percent) showed business out-migration rates of less 

than 1 percent. While basic out-migration rates vary depending on the type and 

configuration of measured jurisdictions, the Region’s rates are low-to-average. The 

overall rate of migration outside the Region is extremely low. In Table 2, the outmigration rate is shown as a percent of the total business establishment population, rather 

than as an index relative to US performance (as are all other figures). Out-migration rates 

varied from 0 in MS 1D to a very high 4.33 percent in GA 2D ( a score which may have 

been distorted by zip code boundary changes over the course of the time series).

Sales Vitality: Twenty-nine of seventy-one LDDs (41 percent) showed a sales vitality 

index at or above the US average, leaving 59 percent below the US mark. It should be 

emphasized that the sales vitality index includes only single-site firms.5 The sales index 

also measures only the change between surviving firms and original pool. Finally, index 

rates in areas that indicated lowered average sales over the five-year time series might 

reflect changes in industry mix rather than actual downturns among existing firms.

Job Vitality and Replenishment: By contrast, only nineteen LDDs15 percent of the 

totalregistered job vitality rates at or above the national average (as did the Region 

overall). Job vitality rates were 25 percent or more below the national average in 31 

LDDs or 44 percent of the total group. The Region did better in the Job Replenishment 

Rate, which measures jobs lost to business failures against those gained by surviving 

firms: on this score, 39 LDDs or 55 percent did better than average. As is the case with 

the Sales Vitality measure, the Job Vitality index measures only the change between 

surviving firms and original pool.

 

5

 As noted, the Region’s many branch facilities cannot be measured for sales, and headquarters sales reports 

are distorted by agglomeration of branch revenues.
18

Area Out Migration ** Retention Index Sales Index Job Index Replenishment Sales/Employee

Appalachian Region 0.10% 1.08 1.14 1.00 1.00 0.94

ARC Alabama 1A 0.65% 0.94 1.21 0.74 0.85 0.88

ARC Alabama 1B 0.98% 1.07 1.43 0.74 0.96 0.96

ARC Alabama 1C 0.63% 0.99 1.28 0.74 0.88 0.99

ARC Alabama 1D 0.65% 1.03 1.38 1.48 1.11 0.89

ARC Alabama 1E 0.66% 1.00 1.93 1.29 1.04 1.11

ARC Alabama 1F 0.54% 1.01 1.34 0.87 0.97 0.86

ARC Alabama 1H 2.69% 0.70 1.36 0.00 0.49 0.80

ARC Alabama 1I 1.09% 0.85 0.91 0.00 0.62 0.65

ARC Georgia 2A 1.12% 1.02 0.95 1.09 1.01 0.88

ARC Georgia 2B 1.05% 1.03 0.92 1.20 1.07 0.90

ARC Georgia 2C 1.16% 1.00 1.17 0.87 0.98 0.97

ARC Georgia 2D 4.33% 0.86 2.00 1.31 0.94 1.33

ARC Georgia 2E 1.94% 1.10 0.00 0.72 1.00 0.81

ARC Georgia 2F 1.06% 1.08 0.79 0.80 1.00 0.97

ARC Kentucky 3A 1.57% 1.14 0.77 0.60 0.95 0.99

ARC Kentucky 3B 0.78% 1.09 1.04 0.96 1.02 0.92

ARC Kentucky 3C 0.88% 1.16 1.18 0.87 1.12 0.79

ARC Kentucky 3D 0.98% 1.14 0.46 0.80 1.10 0.81

ARC Kentucky 3E 1.02% 0.96 1.28 1.20 0.95 0.90

ARC Kentucky 3F 0.74% 1.07 1.01 0.87 1.00 0.71

ARC Kentucky 3H 1.11% 1.05 0.63 0.96 1.02 0.82

ARC Kentucky 3I 1.41% 1.06 1.16 1.20 1.03 0.71

ARC Kentucky 3J 3.16% 1.09 2.00 0.72 1.01 1.43

ARC Maryland 4A 0.62% 1.12 2.32 0.80 1.05 1.08

ARC Mississippi 5A 0.96% 0.99 0.00 0.65 0.82 0.78

ARC Mississippi 5B 0.75% 1.02 1.27 0.92 0.92 0.88

ARC Mississippi 5C 0.58% 1.13 0.48 0.55 0.96 0.73

ARC Mississippi 5D 0.00% 1.10 0.00 0.00 0.76 0.57

ARC Mississippi 5E 1.18% 1.04 0.64 0.72 0.86 0.72

ARC New York 6A 0.56% 1.11 0.73 0.87 1.05 0.80

ARC New York 6B 0.47% 1.07 0.98 2.03 1.37 0.70

ARC New York 6C 0.71% 1.06 0.79 0.60 0.92 0.79

ARC North Carolina 7A 0.70% 1.08 1.11 0.48 0.92 0.67

ARC North Carolina 7B 0.55% 1.06 0.66 1.00 1.06 0.78

ARC North Carolina 7C 1.19% 1.12 1.07 0.80 1.03 0.88

ARC North Carolina 7D 0.66% 1.11 0.92 0.92 1.07 0.74

ARC North Carolina 7E 0.78% 1.09 0.87 0.86 1.01 0.78

ARC North Carolina 7I 1.14% 1.00 1.02 1.28 1.04 0.89

ARC Ohio 8A 1.36% 1.12 0.89 0.87 1.06 0.73

ARC Ohio 8B 1.00% 1.16 0.88 1.20 1.17 0.72

ARC Ohio 8C 0.75% 1.19 1.49 0.65 1.08 0.98

ARC Pennsylvania 9A 0.54% 1.19 1.02 0.80 1.07 0.79

ARC Pennsylvania 9B 0.94% 1.20 0.42 0.65 1.06 0.82

ARC Pennsylvania 9C 1.05% 1.14 0.72 1.07 1.05 0.79

ARC Pennsylvania 9D 0.57% 1.13 0.98 0.65 1.00 0.79

ARC Pennsylvania 9F 0.64% 1.17 0.57 0.65 1.03 0.91

ARC Pennsylvania 9G 0.61% 1.16 0.51 0.80 1.06 0.81

ARC Pennsylvania 9H 0.33% 1.12 1.65 1.00 1.11 1.07

ARC South Carolina 10A 0.56% 1.03 0.75 0.80 0.93 0.90

ARC Tennessee 11A 0.41% 1.15 0.79 0.87 1.04 0.76

ARC Tennessee 11B 0.39% 1.05 1.27 0.74 0.95 0.91

ARC Tennessee 11C 0.34% 1.11 0.72 0.51 0.89 0.76

ARC Tennessee 11D 0.84% 1.10 0.61 0.20 0.83 0.75

ARC Tennessee 11E 0.66% 1.04 0.61 1.03 1.02 0.77

ARC Virginia 12A 1.03% 0.99 0.78 1.07 0.96 0.82

ARC Virginia 12B 0.62% 0.99 0.00 1.09 0.95 0.59

ARC Virginia 12C 0.94% 1.11 0.91 0.44 0.90 0.67

ARC Virginia 12D 0.61% 1.09 2.44 0.75 0.99 1.06

ARC Virginia 12E 3.19% 1.03 0.42 0.60 0.90 0.74

ARC Virginia 12F 1.08% 1.26 0.81 1.11 1.28 0.61

ARC West Virginia 13A 1.25% 1.10 0.49 0.65 0.98 0.67

ARC West Virginia 13B 1.15% 1.06 1.45 0.74 1.02 0.89

ARC West Virginia 13C 1.15% 1.03 1.67 0.51 0.89 1.09

ARC West Virginia 13D 0.80% 1.12 1.25 0.96 1.08 0.72

ARC West Virginia 13E 0.97% 1.10 0.93 0.74 0.95 0.80

ARC West Virginia 13F 0.74% 1.01 0.98 0.55 0.82 0.77

ARC West Virginia 13G 0.68% 1.12 0.67 0.72 1.00 0.68

ARC West Virginia 13H 0.41% 1.15 0.32 1.09 1.18 0.73

ARC West Virginia 13I 1.12% 0.98 0.05 0.72 0.87 0.56

ARC West Virginia 13J 0.90% 1.12 1.47 1.00 1.08 0.78

ARC West Virginia 13K 1.41% 1.13 0.68 0.28 0.88 1.23

T-2. Retention Vitality Indices
19

As a result, the Sales Vitality and Job Vitality measures should be viewed in the context 

of the Sales per Employee (SPE) rate for surviving firms. The SPE index gives the reader 

a sense of competitive position of an area by industry. The findings for the SPE Index is 

troubling indeed. Only eight LDDs (11 percent) rated above the national average. 

Another twelve (17 percent) were within 10 percent of the national trend. But the median 

SPE Index for ARC LDDs was only 80 percent of the national average. The Region 

overall scored 0.94.

Entrepreneurial Vitality: As Table 3 shows only six LDDs had a startup rate higher than 

the US average. This double whammylow sales per employee among retained firms, 

and low levels of entrepreneurial vitalitycreates a problematic picture for the Region 

and most of its LDDs. It is not a picture which is dramatically changed by the relatively 

high levels of startup survival in most LDDs, 37 of which performed above the national 

average.

In addition to the low entrepreneurial activity (68 percent of LDDs had startup activity 

rates 20 percent or more below the national average), the performance of startups in the 

most LDDs is below average. Only 12 of 71 LDDs (17 percent) show a higher Sales 

Vitality Index than the US measure, and the Region overall registers 0.66. The startup job 

vitality picture is better, but still only 44 percent of all LDDs attain national standards, 

and the same percentage falls 20 percent or more below the norm. Only 15 percent of 

LDDs have a higher than average Startup Job Replenishment Index. And most telling, the 

Region’s low overall retained firm sales per employee rate is matched by equally poor 

performance among startups in the LDDs; only five LDDs (7 percent) are above the 

national rate, while a whopping 55 (77 percent) fall more than 20 percent below average. 

The Regional score is 0.75, much lower than its overall retained firm SPE Index of 0.94.
20

Area Start Rate Index Retention Index Sales Index Job Index Replenishment Sales/Employee

Appalachian Region 0.87 1.02 0.66 1.13 0.98 0.75

ARC Alabama 1A 0.84 0.78 0.35 1.50 0.93 0.48

ARC Alabama 1B 0.83 0.92 2.15 1.93 1.27 1.96

ARC Alabama 1C 1.04 0.84 0.76 0.75 0.65 0.76

ARC Alabama 1D 0.94 0.92 0.34 1.25 0.91 0.47

ARC Alabama 1E 1.08 0.94 1.11 1.17 1.02 0.79

ARC Alabama 1F 0.90 0.91 1.12 0.12 0.56 0.96

ARC Alabama 1H 0.96 0.94 1.17 0.00 0.47 1.13

ARC Alabama 1I 0.87 1.19 4.92 2.70 2.30 0.36

ARC Georgia 2A 1.03 1.02 1.01 1.31 1.07 0.79

ARC Georgia 2B 1.14 0.95 0.46 1.75 1.30 0.59

ARC Georgia 2C 1.13 0.99 0.00 0.90 0.83 0.70

ARC Georgia 2D 1.43 0.79 0.36 0.75 0.69 0.87

ARC Georgia 2E 0.85 1.06 0.00 0.90 0.95 0.42

ARC Georgia 2F 0.79 1.00 0.10 0.00 0.34 0.88

ARC Kentucky 3A 0.57 0.82 1.00 1.50 0.78 0.75

ARC Kentucky 3B 0.80 0.99 0.43 0.75 0.87 0.64

ARC Kentucky 3C 0.86 1.03 0.00 1.25 1.15 0.61

ARC Kentucky 3D 0.77 1.07 0.44 1.50 1.12 0.82

ARC Kentucky 3E 0.71 0.67 0.16 0.30 0.45 0.71

ARC Kentucky 3F 0.65 0.96 0.03 0.90 0.86 0.55

ARC Kentucky 3H 0.73 1.02 0.97 0.75 0.95 0.75

ARC Kentucky 3I 0.63 0.63 0.00 1.00 0.64 0.21

ARC Kentucky 3J 0.42 1.71 0.55 1.13 1.74 0.39

ARC Maryland 4A 0.78 1.12 0.48 1.50 1.12 0.77

ARC Mississippi 5A 0.88 0.99 0.00 0.90 0.97 0.68

ARC Mississippi 5B 0.74 0.92 0.10 0.50 0.65 0.77

ARC Mississippi 5C 0.86 1.18 0.42 1.07 1.18 0.64

ARC Mississippi 5D 0.76 0.53 0.00 0.00 0.34 0.18

ARC Mississippi 5E 0.70 0.36 0.72 0.00 0.07 1.45

ARC New York 6A 0.60 1.15 0.08 0.50 0.85 0.72

ARC New York 6B 0.72 0.93 0.00 0.75 0.84 0.44

ARC New York 6C 0.59 1.13 0.50 1.25 1.10 0.90

ARC North Carolina 7A 0.82 1.15 1.52 0.30 0.90 1.21

ARC North Carolina 7B 0.81 1.00 0.31 0.67 0.79 0.43

ARC North Carolina 7C 0.71 0.99 0.00 0.00 0.36 0.67

ARC North Carolina 7D 0.77 1.16 0.58 0.90 1.18 0.63

ARC North Carolina 7E 0.71 1.06 0.03 1.27 1.07 0.88

ARC North Carolina 7I 0.76 0.97 0.65 1.00 0.96 1.07

ARC Ohio 8A 0.70 1.12 0.25 1.05 1.08 0.61

ARC Ohio 8B 0.64 1.23 0.20 0.75 0.96 0.84

ARC Ohio 8C 0.62 1.14 1.34 1.50 1.26 0.68

ARC Pennsylvania 9A 0.61 1.22 0.18 0.75 1.06 0.91

ARC Pennsylvania 9B 0.62 1.31 0.00 0.41 1.04 0.54

ARC Pennsylvania 9C 0.49 0.99 0.00 0.00 0.65 0.47

ARC Pennsylvania 9D 0.64 1.10 0.00 0.00 0.67 0.68

ARC Pennsylvania 9F 0.55 1.16 0.36 1.00 1.19 0.60

ARC Pennsylvania 9G 0.57 1.19 0.32 0.38 0.87 0.78

ARC Pennsylvania 9H 0.65 1.12 0.42 1.31 1.17 0.80

ARC South Carolina 10A 0.94 0.91 0.28 2.00 1.15 0.63

ARC Tennessee 11A 0.74 1.01 0.85 0.67 0.88 0.40

ARC Tennessee 11B 0.97 0.98 0.45 1.50 1.11 0.70

ARC Tennessee 11C 0.69 1.05 0.20 1.65 1.25 0.62

ARC Tennessee 11D 0.73 1.13 0.00 0.67 0.96 0.63

ARC Tennessee 11E 0.94 0.91 0.93 1.27 0.97 0.92

ARC Virginia 12A 0.78 1.11 0.00 0.30 0.79 0.37

ARC Virginia 12B 0.61 1.00 0.00 0.19 0.65 0.54

ARC Virginia 12C 0.55 1.08 4.62 1.29 1.15 0.63

ARC Virginia 12D 0.77 1.22 0.05 0.30 0.80 0.51

ARC Virginia 12E 0.67 0.97 0.00 0.00 0.41 0.54

ARC Virginia 12F 0.72 1.52 0.11 1.13 1.58 0.40

ARC West Virginia 13A 0.76 0.99 0.00 0.94 1.01 0.73

ARC West Virginia 13B 0.75 0.95 0.08 0.86 0.87 0.42

ARC West Virginia 13C 0.85 0.99 1.52 2.55 1.62 0.74

ARC West Virginia 13D 0.70 0.96 0.27 0.56 0.88 0.58

ARC West Virginia 13E 0.75 0.89 0.97 0.21 0.59 0.67

ARC West Virginia 13F 0.71 0.87 0.00 1.25 0.91 0.41

ARC West Virginia 13G 0.61 1.17 0.75 1.07 1.17 0.66

ARC West Virginia 13H 0.60 1.36 1.14 1.00 1.35 0.94

ARC West Virginia 13I 0.84 1.05 0.00 0.30 0.71 0.36

ARC West Virginia 13J 0.68 1.14 0.00 0.50 0.83 0.61

ARC West Virginia 13K 0.68 0.69 0.18 0.00 0.31 0.62

T-3. Startup Vitality Indices
21

High growth firm concentrations: The High Growth Indices measure relative 

concentrations of high growth firms in each area (see Section II, Methodology). While 

high growth firms constitute very small percentages of the overall count of business 

establishments in virtually any area, the long term impact they bring to an areadirect 

and indirect wages, stability, workforce development efforts and aura of 

confidenceextend beyond their raw numbers. Thus, as an indicator of area vitality, 

collections of high growth firms generally occupy an important place. Notably, the high 

growth measures include both branch and headquarters facilities, so LDDs hosting 

disproportionate concentrations of either or both are not at a disadvantage in this scoring.

As Table 4 indicates, most of the Region’s LDDs trail in this rating. The lag is of 

particular concern when coupled with lackluster entrepreneurial activity, since the two 

sets of measures comprise the best new vitality indicators employed by this analysis. 

Only eleven of 71 LDDs (15 percent) evidenced aggregate high growth firm 

concentrations above the national average. About half of these were very small LDDs, 

showing fewer than 100 high growth firms. Forty-six LDDs (38 percent) registered high

growth concentrations 20 percent or more below average. The Regional average was 

0.90, or ten percent below the national average.

The best LDD performances were among the largest classes of firms examined; nineteen 

LDDs (27 percent) demonstrated higher than average concentrations for firms which 

began with fewer than fifty employees and ended the period with more than one hundred. 

Twenty-five percent showed higher than average rates for the largest class measured: 

firms that began the analysis period with fewer than one hundred employees and ended 

with more than two hundred fifty. However, the number of firms involved in these 

classes is small, just under twelve hundred Region-wide. Notably, 412 of these35 

percent of the Regional totalare branch facilities, a type of establishment on which 

much of the Region has traditionally relied. Nationally, just 30 percent of high growth 

firms in these classes are branch facilities.

The Region’s disproportionate reliance on branch facilities poses some long-term 

challenges and opportunities. In one sense branch facilities are bolstering the Region, as 

the development of large manufacturing facilities and branch facility component 

suppliers in North Carolina and, most recently, Mississippi suggest. However, these 

positive developments may not be fully mined for entrepreneurial spin-off efforts which 

could anchor local economic vitality in a way not traditionally experienced in most of 

Appalachia. 
22

Table-4. LDD High Growth Ratings by Establishment Employment Size 

Establishment Class Class I Class II Class III Class IV Class V Aggregate

Employment Size <5>10 <10>25 <25>50 <50>100 <100>250

Above US average 28% 17% 17% 27% 25% 15%

Lagged by 20%-plus 31% 49% 49% 54% 65% 39%

More telling is how many LDDs lagged. Twenty-eight percent of the LDDs did well in 

the smallest high growth employment class measured (began with fewer than five 

employees, ended with more than ten), registering rates above the national average, 

However, 31 percent of the LDDs performed at least twenty percent below the national 

rate, and in every other high growth class, with lagging LDDs far outnumbering those 

that held their own.
23

Area Aggregate Class I Class II Class III Class IV Class V

<5>10 jobs <10>25 jobs <25>50 jobs <50>100 jobs <100>250 jobs

Appalachian Region 0.90 0.95 0.87 0.85 0.89 0.82

ARC Alabama 1A 0.56 0.55 0.43 0.58 0.70 0.77

ARC Alabama 1B 0.95 0.98 0.91 0.81 1.02 0.57

ARC Alabama 1C 0.77 0.79 0.74 0.85 0.61 0.11

ARC Alabama 1D 0.95 1.08 0.82 0.81 1.36 0.85

ARC Alabama 1E 1.02 1.12 0.93 0.98 1.00 0.99

ARC Alabama 1F 0.73 0.74 0.71 0.61 0.68 0.76

ARC Alabama 1H 0.55 0.64 0.13 0.00 0.00 0.00

ARC Alabama 1I 0.51 0.48 0.00 0.70 0.00 0.00

ARC Georgia 2A 0.91 0.84 1.11 0.96 0.97 1.28

ARC Georgia 2B 0.89 0.89 0.68 0.78 0.68 1.13

ARC Georgia 2C 1.11 1.19 0.68 0.79 0.91 1.51

ARC Georgia 2D 1.19 1.23 1.19 1.17 1.04 0.73

ARC Georgia 2E 0.80 0.85 0.79 0.60 0.41 0.68

ARC Georgia 2F 1.09 1.13 0.75 1.06 1.06 0.70

ARC Kentucky 3A 0.79 0.67 1.00 0.42 0.00 0.00

ARC Kentucky 3B 1.02 1.11 0.83 0.86 0.86 0.48

ARC Kentucky 3C 0.85 0.80 0.67 1.11 1.47 1.47

ARC Kentucky 3D 0.85 0.92 0.53 0.58 0.29 0.00

ARC Kentucky 3E 0.88 0.94 0.58 0.57 0.63 0.84

ARC Kentucky 3F 0.90 0.84 1.01 0.93 0.80 0.45

ARC Kentucky 3H 0.77 0.83 0.99 0.91 0.76 0.00

ARC Kentucky 3I 0.78 0.71 0.73 0.80 0.80 0.66

ARC Kentucky 3J 0.36 0.42 0.00 0.00 0.00 0.00

ARC Maryland 4A 0.96 1.05 1.07 0.80 1.13 0.25

ARC Mississippi 5A 0.68 0.71 0.88 0.46 0.46 0.00

ARC Mississippi 5B 0.83 0.86 0.80 0.56 0.90 1.24

ARC Mississippi 5C 0.81 0.90 0.84 0.59 0.24 0.79

ARC Mississippi 5D 0.28 0.00 0.00 0.00 3.10 0.00

ARC Mississippi 5E 0.32 0.19 0.50 0.86 0.00 0.00

ARC New York 6A 0.86 0.86 0.78 0.94 1.15 0.58

ARC New York 6B 0.79 0.82 0.80 0.77 0.90 1.35

ARC New York 6C 0.83 0.86 0.70 0.55 0.85 0.44

ARC North Carolina 7A 0.80 0.82 0.58 0.56 0.41 0.34

ARC North Carolina 7B 0.96 1.01 0.85 0.69 0.62 0.47

ARC North Carolina 7C 0.79 0.75 0.72 0.83 0.92 0.61

ARC North Carolina 7D 0.95 0.86 0.96 0.86 0.86 0.32

ARC North Carolina 7E 0.90 0.76 1.09 1.20 1.42 2.16

ARC North Carolina 7I 0.95 0.98 0.84 0.75 0.75 0.99

ARC Ohio 8A 0.85 0.85 0.87 0.95 1.11 1.11

ARC Ohio 8B 0.92 0.99 0.88 0.74 1.04 0.87

ARC Ohio 8C 1.10 1.19 0.93 0.95 0.91 0.58

ARC Pennsylvania 9A 1.01 1.07 0.96 0.81 0.90 0.72

ARC Pennsylvania 9B 0.97 0.95 0.77 0.98 1.06 0.70

ARC Pennsylvania 9C 0.47 0.49 0.57 0.42 0.29 0.00

ARC Pennsylvania 9D 0.74 0.76 0.66 0.71 0.70 0.58

ARC Pennsylvania 9F 0.87 0.92 0.88 0.89 0.82 0.74

ARC Pennsylvania 9G 0.78 0.85 0.76 0.66 0.48 0.44

ARC Pennsylvania 9H 0.99 1.04 1.05 0.95 1.19 1.26

ARC South Carolina 10A 0.96 1.03 0.94 1.04 1.00 1.04

ARC Tennessee 11A 0.90 0.93 0.78 0.79 0.51 0.48

ARC Tennessee 11B 0.99 1.07 0.92 0.93 1.12 1.05

ARC Tennessee 11C 0.84 0.90 0.83 0.82 0.80 0.84

ARC Tennessee 11D 0.72 0.78 0.44 0.62 0.42 0.00

ARC Tennessee 11E 0.90 0.96 0.84 0.96 0.91 1.08

ARC Virginia 12A 0.55 0.66 0.92 0.27 0.00 0.00

ARC Virginia 12B 0.75 0.88 0.92 1.26 0.91 2.26

ARC Virginia 12C 0.49 0.47 0.41 0.31 0.42 0.70

ARC Virginia 12D 0.97 1.12 0.79 0.91 0.75 1.50

ARC Virginia 12E 0.37 0.31 0.26 0.14 0.29 0.00

ARC Virginia 12F 0.28 0.17 0.30 1.00 0.00 0.00

ARC West Virginia 13A 0.80 0.92 0.75 0.81 0.85 0.00

ARC West Virginia 13B 0.84 1.08 0.90 0.45 0.71 1.17

ARC West Virginia 13C 0.99 1.04 1.16 1.23 1.19 0.83

ARC West Virginia 13D 0.87 0.90 1.04 0.62 0.88 0.58

ARC West Virginia 13E 0.80 0.82 0.62 0.66 0.91 0.43

ARC West Virginia 13F 1.10 1.13 1.18 1.38 0.84 0.50

ARC West Virginia 13G 1.02 1.05 0.63 0.94 0.37 0.00

ARC West Virginia 13H 0.65 0.56 0.82 1.17 0.67 1.12

ARC West Virginia 13I 0.92 0.95 0.91 0.56 0.38 0.00

ARC West Virginia 13J 1.19 1.29 1.55 1.31 1.22 1.16

ARC West Virginia 13K 1.10 1.14 1.24 1.62 1.60 1.32

T-5. High Growth Firm Index (class definitions in Section II)
24

The Appalachian Region

Appalachian businesses totaled 692,876 establishments in 1996, and by the beginning of 

2001 totaled 850,427an increase of 22.7 percent.6 During the same period, Regional 

jobs increased from about 7.9 million to 9.8 million. Over the five-years there were 

97,717 new entrepreneurial firms created in the Region that were still operating at the 

beginning of 2001. These startups accounted for 17 percent of firms for which ages could 

be identified. By contrast, the US had more than 1.5 million business starts US, 

accounting for 19.5 percent of firms for which ages could be identified. 

At the end of 2000, Regional manufacturing firms comprised 5.7 percent of the business 

establishment population, but accounted for 20.9 percent of the jobs. Nationally, the 

manufacturing segment comprised about the same percentage of firms (5.6 percent) but a 

much lower proportion of total employees (16.1 percent). Business services, the most 

well-populated technology segment, accounted for 5.3 percent of Regional business 

establishments and 4.3 percent of the Region’s jobs, substantially below the US level of 

7.4 percent of firms and 6.4 percent of jobs. Much of this gap can be attributed to lower 

than average entrepreneurial vitality among technology firms, as well as lower 

entrepreneurial vitality in the general business population.

Key findings from the analysis of the Region as a whole indicate that Appalachia has 

done well in retaining existing firms, but remains caught in a cycle of low levels of 

entrepreneurship, low growth among existing firms, and a continued over-reliance on 

branch facilities. Yet, even the Region’s high retention rate presents cause for concern as 

these high retention rates are often found in non-value added retail and services in lowgrowth areas.7

 While vitality among retained firms in the Region is quite good in 

aggregate, overall positioning of retained firms, as indicated by the sales per employee 

index, is fully 6 percent below average. Indeed, if the retention rate component were to be 

excluded from the summary index depicted in Table 1, Appalachia’s summary score 

would be ten percent below the national benchmarknot the five percent shown in the 

tables.

Analysis of Regional Business Retention and Vitality

Given the potential two-sided interpretation of high retention rates, it would be 

misleading to assess the Region's economic conditions based solely on its stellar retention 

performance. On the positive side, 72 of 73 major industries were at or above the US 

industry retention average, with only coal mining having a five-year retention rate below 

the US industry average. Sixteen industries, including printing, chemicals and 

engineering, had retention rates more than 10 percent above average. Existing business 

services establishments, which rated 8 percent above national retention rates, probably 

benefit from the scarcity of such business services in many rural ARC districts. However, 

only 19 major industries show job vitality patterns among surviving firms that are higher 

than US trends, and only a handful of these tend to be in locally controlled industries. 

Seven are manufacturing industries, not in any discernable grouping, but include 

 

6 Due to gaps in the databases at various points in time, this does not imply a corresponding net growth in 

the number of Regional firms over the same time period.

7

 The retention index is most valuable in conjunction with high growth and good positioning.
25

important and often cyclical, regional industries such as primary metals and paper goods 

production. And only a dozen industries have sales per employee rates among surviving 

firms that top their peers across the US. Thus, on balance most sectors are relatively 

weakly positioned compared to their national peer industries.

Nonetheless, as Table 6 makes clear, many firms in the Region have done relatively well

on average since 1996, based on sales and employment barometers. Sales vitality for 

those firms that have survived over the five-year period outpaced US norms considerably. 

Job growth and expansions among retained firms seem to have kept pace with US trends. 

However, retained firm sales vitality has lagged in some critical industries, including 

technology industries (business services, communications, health care) and 

manufacturing industries that are core to various districts (paper, instruments, printing, 

electronics, apparel, textiles, food products, oil products). One major concern is that sales 

per employee rates are higher than average in only a handful manufacturing 

industrieswood products, leather and fabricated machinerysuggesting lagging 

positioning in other sectors. 

Retained

SIC Industry Firms Retention Index Sales Index Job Index SPE Index

2273 Carpets and rugs 431 1.06 2.35 0.15 1.06

2411 Logging 859 0.96 0.86 1.00 0.79

2421 Sawmills and planing mills, general 1,082 1.01 0.64 2.95 0.82

2426 Hardwood dimension and flooring mills 310 1.06 0.87 0.96 0.97

2431 Millwork 534 1.03 1.58 1.16 1.13

2434 Wood kitchen cabinets 436 1.06 0.26 1.31 0.96

2448 Wood pallets and skids 352 1.12 1.26 0.47 1.17

2499 Wood products, nec 379 1.10 0.52 1.48 0.82

2511 Wood household furniture 487 0.99 0.76 0.55 0.96

2512 Upholstered household furniture 335 1.07 0.56 0.79 0.88

2711 Newspapers 1,110 1.09 0.42 0.29 0.98

2721 Periodicals 350 1.05 1.27 0.73 0.87

2741 Miscellaneous publishing 313 1.02 0.76 0.97 0.84

2752 Commercial printing, lithographic 2,436 1.11 0.84 0.80 0.92

2759 Commercial printing, nec 1,148 1.16 0.66 0.73 0.72

3089 Plastics products, nec 712 1.06 0.92 0.96 0.99

3272 Concrete products, nec 378 1.04 1.08 0.40 0.91

3273 Ready-mixed concrete 567 1.08 0.87 0.62 0.93

3441 Fabricated structural metal 570 1.11 0.52 0.18 0.94

3444 Sheet metalwork 324 0.96 0.59 0.29 0.93

3544 Special dies, tools, jigs, and fixtures 569 1.12 0.72 0.56 0.78

3599 Industrial machinery, nec 2,446 1.08 0.65 0.68 0.90

3949 Sporting and athletic goods, nec 315 1.01 0.02 0.75 0.76

3993 Signs and advertising specialties 1,029 1.12 0.90 1.00 1.06

3999 Manufacturing industries, nec 305 1.13 1.26 1.63 0.69

T-6. Regional Retention Vitality Indices: Top 25 Detailed Industries

US = 1.00

As Table 6 indicates, twelve manufacturing industries in the region each had at least five 

hundred retained firms from the 1996 pool traced through the beginning of 2001. These 

accounted for 13,062 firms, about 30 percent of the total population of surviving 

manufacturing establishments. Among the largest of these industries, the retention rates 

were higher than average in all but one (logging). Conversely, sales and job changes 
26

among surviving firms trailed US averages in most of these large industries. Millwork 

was a standout, reflecting higher than average vitality ratings in every category, including 

sales per employee. Plastics molding and sawmills were the other leading performers. 

Among slightly smaller industries (300-499 employment-size establishments) wood 

cabinets and other value-added wood products were among the high performers. Vitality 

in other traditional Regional industriesfabricated metals, wood furniture and even tool 

and diewas mixed.

Regional Technology Retention and Vitality

As depicted in Table 7, Regional technology industries lag quite seriously in most 

retained firm vitality measures. Taken alone, technology retention rates are themselves 

quite high, with a few exceptions in only a handful of smaller industries. However, the 

pattern is largely reversed in both sales and job vitality categories, where Regional 

performance falls significantly behind US patterns in most industries, particularly those 

with the largest numbers of establishments. In addition, larger technology industries also 

exhibit lower than average sales per employee rates among retained firms, suggesting a 

lagging competitive position.

SIC Industry Retained

Firms Retention Sales Index Job Index SPE Index

3571 Electronic computers 82 1.06 0.22 1.30 0.75

3572 Computer storage devices 7 2.06 7.46 1.73 1.18

3575 Computer terminals 19 1.10 0.68 0.00 1.26

3577 Computer peripheral equipment, nec 83 1.09 3.00 2.12 1.08

4822 Telegraph/ other communications 68 0.86 0.00 0.00 0.34

4899 Communication services, nec 85 1.12 0.81 1.50 0.69

7371 Custom computer programming 1,211 1.05 0.70 0.98 0.90

7372 Prepackaged software 569 1.08 0.35 0.83 1.00

7373 Computer integrated systems design 498 1.11 3.34 0.42 1.72

7374 Data processing and preparation 481 1.10 0.61 0.65 0.93

7375 Information retrieval services 46 0.96 0.00 0.00 1.13

7376 Computer facilities management 17 1.11 2.01 0.38 0.87

7377 Computer rental and leasing 39 0.81 0.59 0.00 1.00

7378 Computer maintenance & repair 394 1.06 0.46 4.00 0.93

7379 Computer related services, nec 554 1.01 0.67 0.63 0.76

T-7. Selected Appalachian Technology Retention Indices

US = 1.00

On the positive side of the Region’s performance, fewer than 400 firms of all sizes 

migrated outside the region over the five years under reviewabout on par with the 

three-year US average. In general, firm out-migration is not an overriding concern for the 

region. In addition, because of differences in migration patterns on larger geographic 

scale, the Regional rates should not be used as a barometer for more localized relocation 

data. That is to say, LDD migration levels may be higher than the regional overall, yet 

still in line with corresponding jurisdictions, since local and small-scale regional 

migration activity is invariably higher than among larger geographical entities; for 
27

example, interstate migration is always less intensive than migration within MSAs or 

between county jurisdictions.

Regional Startup Activity and Vitality

The Region’s relatively good retention index should be viewed in the light of 

entrepreneurial vitality, including measures of the experience of startup firms and overall 

startup activity. Both present problems for the region. 

First the good news: Startups in the region tended to survive at slightly higher rate than 

the US average over the five-year period. Surviving startups also tended to add jobs at a 

very good clip. But the loss of jobs by failed startups outpaced US norms, and sales 

vitality was low among retained firms, suggesting a tendency among startups to grow 

jobs without being able to sustain them. Sales per employee among surviving startups is 

low. And, perhaps most importantly, Appalachian startup activity ratesthe measure of 

raw entrepreneurial activityare 13 percent below national levels. 

Startup activity rates are above average in only 13 of 73 major industries. The leaders 

include several manufacturing industries critical to Regional vitality: primary metals, 

fabricated metal transportation equipment, plastics and furniture. Startups in the 

technology-oriented instrument group are just under US norms. Business Services 

startups (including computer-related) run 12 percent below US trends, while 

communications startsthe national leaderare 27 percent below the US rate. Business 

Services startups also reflect a low survival rate, although communications startup 

survival is 14 percent higher than average. 

Non-branch sales vitality patterns among surviving startups appear quite positive in core 

manufacturing industries, including primary metals, industrial machinery (including tool 

and die), plastics, wood products and furniture and motor freight transport (trucking). 

Local and regional rail services also did well. On the down side, electronics, instruments, 

fabricated metals, foods, professional services, business services and communications 

startups all showed sales vitality problems among retained firms. Poor entrepreneurial 

performance in Appalachia is underscored by low sales vitality among startups and low 

aggregate sales per employee for retained startups. Notably, however, sales per employee 

rates were high among wood and furniture, primary and fabricated metals.
28

SIC Industry Starts Start Rate Start Index (US = 1.00)

3571 Electronic computers 26 28.9% 0.88

3572 Computer storage devices 2 11.1% 0.32

3575 Computer terminals 10 37.0% 0.99

3577 Computer peripheral equipment, nec 26 33.3% 1.21

4822 Telegraph/ other communications 7 26.9% 0.88

4899 Communication services, nec 47 43.1% 1.01

7371 Custom computer programming 558 32.5% 0.88

7372 Prepackaged software 110 21.2% 0.95

7373 Computer integrated systems design 220 29.0% 0.99

7374 Data processing and preparation 325 35.0% 0.86

7375 Information retrieval services 61 45.9% 1.02

7376 Computer facilities management 7 35.0% 1.45

7377 Computer rental and leasing 11 52.4% 2.38

7378 Computer maintenance & repair 219 35.5% 0.89

7379 Computer related services, nec 531 27.4% 0.94

T-8. Selected Appalachian Technology Startup Rate

In selected technology industries depicted in Table 8, Appalachia is falling further 

behind. While the startup rates for these selected technology industries exhibit higher 

levels of entrepreneurial vitality than in most other Regional industries, the Region’s 

overall startup rate is 13 percent behind the US average. But of the fifteen technologyrelated industries examined in Table 8, only five indicate higher than average startup 

rates. While many of the others, including relatively large manufacturing and computer 

service industries, do better than the regional average, they still trail US patterns, leaving 

the Region with lower than average performance in both entrepreneurial and key 

retention indices.
29

SIC Industry Startups Start Rate Start Rate Index

US = 1.00

2395 Pleating and stitching 111 30.41% 1.06

2411 Logging 107 9.18% 0.93

2421 Sawmills and planing mills 66 7.71% 0.71

2431 Millwork 93 18.24% 1.03

2434 Wood kitchen cabinets 65 14.64% 1.25

2448 Wood pallets and skids 63 16.15% 0.95

2452 Prefabricated wood buildings 52 21.67% 0.98

2499 Wood products, nec 76 15.20% 0.87

2511 Wood household furniture 73 18.48% 1.04

2512 Upholstered household furniture 53 21.03% 1.06

2711 Newspapers 94 13.26% 0.86

2721 Periodicals 61 20.00% 0.86

2731 Book publishing 75 21.49% 0.90

2741 Miscellaneous publishing 88 26.04% 0.88

2752 Commercial printing, lithographic 264 13.17% 0.95

2759 Commercial printing, nec 253 20.64% 0.88

3089 Plastics products, nec 151 24.84% 1.18

3272 Concrete products, nec 59 17.61% 1.05

3312 Blast furnaces and steel mills 52 21.14% 1.02

3441 Fabricated structural metal 116 19.93% 1.05

3444 Sheet metalwork 76 24.13% 1.36

3544 Special dies, tools, jigs, and fixtures 67 12.25% 0.94

3599 Industrial machinery, nec 367 14.63% 0.98

3714 Motor vehicle parts and accessories 63 29.72% 1.34

3949 Sporting and athletic goods, nec 59 17.30% 0.75

3993 Signs and advertising specialties 275 21.38% 0.97

3999 Manufacturing industries, nec 109 25.17% 0.87

T-8. Regional Startup Rates: Manufacturers >50 Startups

In the larger picture, startup rates showed strength in 27 manufacturing industries that had 

at least fifty startups on a Region-wide. Startup activity is impressively high in several 

value-added wood industries, including the high-performing millwork, wood cabinets and 

wood furniture. The strong northern plastics industry outperforms the national startup 

activity rate by 18 percent. And a variety of heavy industries, including steel mills, 

fabricated structural metal, sheet metal and auto components also outperform the US 

average. In spite of very large existing concentrations, tool and die startup activity is only 

6 percent under the US pattern.

High Growth Concentrations

While the Region falls 10 percent behind US patterns in concentrations of high growth 

firms by employment measures, performance is better than anticipated. Among the 

smallest class measured (firms which began with fewer than five employees and grew to 

more than ten over five years), regional performance trailed national patterns by only 5 

percent. Among larger firms, regional ratings lagged US patterns by 11 percent to18 
30

percent. Significant portions of regional high growth firms appear to be concentrated in a 

handful of high vitality districts, leaving most at much lower ratings levels.

Policy Implications

It is always risky to suggest policy direction based on a single analysis which cannot 

reflect the totality of the economic and social conditions in Appalachia or any other 

region or subdivision. Moreover, the policy implications of this analysis will necessarily 

differ in direction, emphasis and value among the Districts. With those caveats, the broad 

results of the vitality analyses developed in this report suggest a number of general 

issues for current and future policy consideration:

1. Retention programs and resources should be targeted.

It is clear that the Region is already a retention rate leader in virtually every major 

industry. Yet high retention rates have done little to spark new growth in many Districts. 

The lesson learned from the analysis is that retention alone does not constitute a basis for 

robust growth. In the case of most areas, retention reflects more economic maintenance 

than vitality. A focus on specific assessment of needs and service delivery to core local 

industry clusters, high vitality industries, and high growth firms would pay off much 

more handsomely than broad-ranging retention outreach programs.

2. Focus on the Regional lag in entrepreneurial activity.

The lag in entrepreneurial activity is clearly Appalachia’s weakest link, one exposed with 

chilling clarity by this analysis. This problem is truly region-wide and across all types of 

industries, core and otherwise. While some Districts have traditionally left 

entrepreneurial issues to Small Business Development Corporations and SCORE 

chapters, others have become heavily engaged in sparking and sustaining entrepreneurial 

startups. It would be important to review these findings within the context of the existing 

entrepreneurial infrastructure and policies within each of the districts. The results of the 

analyses suggest that these efforts should likely be intensified and replicated, and that 

added resources may need to be allocated to support them. 

3. Branch facilities create entrepreneurial opportunities which should be exploited.

While many supporters of the Region are aware of the mixed blessings of branch 

facilities, and of Appalachia’s traditional and double-edged reliance on these large 

absentee-owned facilities, the reality is that some of the Region’s booming Districts owe 

much of their good fortune to the recent development of large industrial (and to a lesser 

extent, service sector) branches. Some of these areas have developed full-blown 

recruitment programs to attract additional branch facilities in supplier capacities for core 

branch establishments. However, the more complex task of identifying and nurturing 

entrepreneurial startup opportunities that could be realized as a result of these same core 

branch facilities has received less attention. Given the clear need for home-grown 
31

entrepreneurial activity throughout the Region such opportunities shouldn’t go 

unexploited.

4. Appalachian technology industries are far from an oxymoron3⁄4but need targeted 

assistance for the Region to catch up.

The region hosts many hundreds of strong technology firms and vital industries across 

hardware, software and telecommunications sectors. Other technology industries lag 

behind national vitality indices. Startup activity rates in almost all strong and weak, 

plentiful and scarceare uncomfortably low. Simply put, if the Region is to catch up, 

more needs to be done to help existing firms advance, and new ones to start up and 

flourish.

5. LDDs and metro areas are irrevocably linked.

For better or worse, LDD economies appear to be increasingly linked to nearby MSAs. In 

most cases, MSAs are outperforming the District’s linked to them, suggesting that 

Districts should increasingly take their cues for attraction and startup efforts from their 

MSA neighbors. In particular, strong levels of MSA startup and high growth 

concentrations provide opportunities, now and later, for long-term District development 

efforts. 

6. Business migration is not a major issue.

While new branch attraction is a larger issue not analyzed in this report, actual business 

out-migration from ARC Districts is rarely among the top concerns revealed by the 

analysis. In general, the Region and its Districts indicate business out-migration at or 

below the average for areas of their type. In general, the same is true to MSAs linked to 

the Region. While individual relocations may cause major problems, there is no 

wholesale exodus that demands special attention.
ARC Firm Formation and Retention Analysis 1996-2001

Appalachian Region

2001 firms analyzed: 850,427

Retention:

692,876 377,528

377,165 54% 1.08

494,617 779,287 57.6% 1.14

12 17 42% 1.00

7,935,795 6,135,401 77% 1.00

82,436 97,411 18% 0.94

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.87

Retained Firms

US = 1.00

While the Region includes vastly disparate economies, the general economic character of many local areas is mirrored in regional data. 

Overall high retention rates apparent in the summary figure do not necessarily reflect solid economic performance, since many low growth 

areas retain stable but less than dynamic firms in large numbers. In fact, there is often an inverse dynamic between high levels of retention 

and low entrepreneurial vitality, especially when coupled with low growth patterns among surviving firms. Such is the case in the Region, 

although the problem is not compounded by low startup survival rates as it is in low-growth districts. Overall sales per employee figures are 

dependent not only on productivity but (like other summary measures) are linked to specific industry mix. And while the summary sales per 

employee measure in the Region is reasonably close to the US norm, healthier and more vital manufacturing concentrations might have 

contributed to even better performance. Concentrations of high growth firms run about 10% below the national level, and much lower in many 

of the Region’s districts. Bottom line: The Region continues to trail US averages in each overall vitality measures except retention, which as 

a stand-alone category represents an ambiguous achievement.

Given the potential two-sided interpretations of high retention rates, it is misleading to assess the Region's stellar retention performance by 

itself; of 73 major industries, only one (coal mining) reflects a five-year retention rate below the US industry average. Sixteen industries, 

including printing, chemicals and engineering, reflect retention rates at least 15% above average. (Existing business services firms probably 

benefit from the scarcity in many rural ARC districts.) However, the retention analysis is conditioned by vitality patterns among survivors, and 

here the evidence is more mixed. Only 19 major industries show job vitality patterns among surviving firms better than US trends, and only a 

handful of these tend to be in locally controlled industries. Seven are manufacturing industries, not in any discernable grouping but including 

important (and often cyclical) traditional regional industries such as primary metals and paper goods production. And only a dozen industries 

have sales per employee rates among surviving firms which top their peers across the US, indicating relatively weak regional positioning 

among many industries.

Nonetheless, it seems clear that longer term firms in the Region are, on average, have done relatively well since 1996. Sales vitality between 

1996 firms and those which have survived from the beginning of that measurement period outpace US norms considerably. Job growth and 

expansions among survivors seem to have kept pace with US trends. However, survivor sales vitality has lagged in some critical industries, 

including both technology industries (business services, communications, health care) and manufacturing industries core to various Regional 

districts (paper, instruments, printing, electronics, apparel, textiles, food products, oil products). One concern: sales per employee rates are 

higher than average in only a handful manufacturing industries – wood products, leather and fabricated machinery, suggesting lagging 

positioning among others. In addition, the sales per employee rate in wood products was likely elevated by increased hardwood prices which 

disproportionately benefited portions of Appalachia. 

Notably, fewer than 400 firms of all sizes -- less than 0.05% -- migrated outside the region over the five years under review, about on par with 

the three-year US interstate average. In general, firm out-migration is not an overriding concern for the region. In addition, because of 

differences in migration patterns on larger geographic configurations, the Regional rates should not be used as a barometer for more localized 

relocation data.

0.94 0.90

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Appalachian Region

2001 firms analyzed: 850,427

Startups:

97,717

17.0%

0.87

20,937 10,161

10,042 48% 1.02

571,157 1,032,959 80.9% 0.66

8 14 75% 1.13

167,662 136,228 81% 0.98

95,193 103,296 9% 0.75

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

432,840 9,399 2.17% 0.95

539,901 3,398 0.87

605,162 2,037 0.34%

645,212 295 0.0500% 0.82

'96 Firms in Class High Growth 96-01 % High Growth US Index

631,107 1,069 0.1700% 0.89

0.63%

0.85

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The Region’s relatively good retention index should be viewed in the light of entrepreneurial vitality, including measures of both the experience 

of startup firms and overall startup activity. Both present problems for the region. 

First the good news: Startups in the region tended to survive at slightly higher levels than the US average over the five-year period. Surviving 

startups also tended to add jobs at a very good clip. But the loss of jobs by failed startups outpaced US norms, and sales growth was low 

among survivors, suggesting a tendency among startups to grow jobs without the financial support needed to sustain them. Sales per 

employee among surviving startups is low. And, perhaps most importantly, startup activity rates – the measure of raw entrepreneurial activity 

– are 13% below average for the region; if a handful of Regional entrepreneurial centers were to be filtered out, this figure would drop 

dramatically.

Startup activity rates are above average in only 13 or 73 major industries, but these include several manufacturing industries critical to 

Regional vitality: primary metal, fabricated metal transportation equipment, plastics and furniture. Startups in the technology oriented 

instrument group are just under US norms. Business Services startups (including computer-related) run 12% below US trends, while 

communications starts – the national leader – are 27% below par. Business Services startups also reflect a low survival rate, although 

communications startup survival is 14% higher than average. 

Sales vitality patterns among surviving startups appear quite positive in core manufacturing industries, including primary metals, commercial 

machinery (including tool and die), plastics, wood products and furniture and motor freight transport (trucking). Local and regional rail services 

also did well. On the down side, electronics, instruments, fabricated metals, foods, professional services, business services and 

communications startups all showed sales vitality problems among survivors. This seems to pinpoint a key problem of entrepreneurial vitality 

throughout the region, also reflected in the low aggregate sales per employee for retained startups. However, sales per employee rates were 

high among wood and furniture, primary and fabricated metals.

While the Region falls 10% behind US patterns in concentrations of high growth firms by employment measures, performance is better than 

anticipated. Among the smallest class measured (firms which began with fewer than five employees and grew to more than ten over five 

years), regional performance trailed national patterns by only 5%. Among larger firms, regional ratings lagged US patterns by 11%-18%. 

Significant portions of regional high growth firms appear to be concentrated in a handful of high vitality districts, leaving most at much lower 

ratings levels.

It is important to bear in mind that these high growth firms represent only a small fraction of area vitality, accounting for less than 2% of all 

firms.

Aggregate : All Classes 645,212 11,844 1.84% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1A

2001 firms analyzed: 7,993

Retention:

7,413 3,545

3,522 48% 0.94

564,349 910,833 61.4% 1.21

13 17 31% 0.74

88,800 58,194 66% 0.85

80,621 91,083 13% 0.88

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.94 0.84

Retained Firms

US = 1.00

The Northwest AL Council of Local Governments covers ARC District 1A, including Colbert, Franklin, Lauderdale, Marion and Winston 

Counties. 

District 1A indicates below average vitality ratings in all aggregate measures. Overall retention fall 6 percent below national norms, while 

retained firm sales per employee ratings are slightly below the Appalachian average. Startup survival rates are considerably lower, a concern 

heightened by the 16 percent lag in startup activity across the District. Concentrations of high growth firms are only slightly more than half of 

national concentrations. Summary scores generally correspond to lackluster performance of the Florence MSA, which covers two counties in 

the District, Colbert and Lauderdale.

While aggregate retention rates fall below national levels, sales vitality among retained firms (change in average survivor sales from the 1996 

pool) is substantially above average. However, low sales per employee rates (and low job vitality measures over the same period) evidence 

that the District’s raw sales still lag behind national patterns. Business out-migration from the District is 0.3 percent from the 1996 group of 

firms analyzed, and 0.6 percent among survivors – not a general cause for concern. While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differ by the number of area firms that ceased operations in the interim.

Both job change and replenishment measures are substantially below national norms. However, vitality rates among retained construction 

firms appear quite high in both sales and job vitality measures. Multiple vitality ratings are also good in several manufacturing industries, 

including food products, paper, printing, chemicals, transport equipment and instruments. Fabricated metals measures are particularly solid 

across the board, while high sales vitality in industrial machinery and electronics contrast to lower job vitality ratings among retained firms. 

Retention indices are quite high in most of these same industries, and sales per employee levels, contrasting the current measure among 

survivors in the District and nationally industry by industry, are high in both fabricated metals and transport equipment.

Motor freight vitality measures lead national patterns, but technology-driven services like communications and business services trail in all 

vitality ratings. Professional support services (engineering and research) scored well. Findings generally correspond to those in the Florence 

MSA.

0.88 0.56

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1A

2001 firms analyzed: 7,993

Startups:

898

16.5%

0.84

246 91

90 37% 0.78

780,412 1,112,821 42.6% 0.35

9 18 100% 1.50

2,053 1,595 78% 0.93

86,712 65,460 -25% 0.48

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,594 58 1.26% 0.55

5,783 18 0.43

6,500 15 0.23%

6,924 3 0.0400% 0.77

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,767 9 0.1300% 0.70

0.31%

0.58

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Aggregate startup activity rates are 16 percent below average, a single per cent higher than in the MSA. Activity is weak almost across the 

board, although small numbers of startups were still enough to push rating beyond national levels in food products, textiles, chemicals and 

fabricated metals – some of the same industries which generated relatively high retention vitality ratings. Vitality measures among retained 

startups in fabricated metals and textiles are also solid. Startups in some construction industries, wood products, printing and motor freight 

did well, also retention rates lagged vitality measures among both construction trade contractors and wood products entrepreneurs. 

In fact, the combination of very low startup activity and low startup retention in the District is an uncommon and concerning pattern, 

suggesting the need for overt focus on entrepreneurial generation and assistance in the area. Those startups which are retained seem to 

develop reasonable job vitality ratings, but sales vitality measures lag considerably overall, and after five years, the aggregate sales per 

employee rating among retained starts is very low.

Not only is entrepreneurial activity quite low, but other possible engines for the district, more mature high growth firms, exist in 

concentrations far below national averages in each employment class analyzed. In larger classes, high growth firm concentrations are 

apparent at about three-quarters of the US levels, but this represents a small number of firms. Among smaller employment classes, 

patterns suggest high growth concentrations only about half or less of the US average. The combination of low concentrations in this 

category, low entrepreneurial activity and low startup retention is concerning, suggesting a District focus on entrepreneurial and technical 

assistance to high opportunity firms.

Aggregate : All Classes 6,924 79 1.14% 0.56
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1B

2001 firms analyzed: 8,057

Retention:

6,735 3,668

3,632 54% 1.07

519,603 895,583 72.4% 1.43

13 17 31% 0.74

83,686 61,811 74% 0.96

74,229 99,509 34% 0.96

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.07 0.83

Retained Firms

US = 1.00

The North Central AL Regional Council of Governments covers ARC District 1B, including Cullman, Lawrence and Morgan Counties. Both 

Lawrence and Morgan Counties are within the Decatur AL MSA. 

The District shows high overall retention rates, and an impressive level of retained firm sales per employee. However, lower than average 

startup survival levels coupled with low entrepreneurial activity rates are a cause for concern. While high growth firm concentrations are 

higher than startup activity levels, they still lag US concentrations, suggesting that these local engines are not able to adequately 

compensate for the lack of entrepreneurial vitality. The sales change index among retained firms overall are positive, and those startups 

which are retained tend to do well. This may suggest that the area is moving ahead based on some generally solid performance rather than 

traditional entrepreneurial growth drivers.

Overall retention rates run 7 percent above the US average, but job vitality indices are somewhat below par. Replenishment rates, suggesting 

expansion activity, are only 4 percent under US patterns, however. Sales vitality over the five-year period was excellent in aggregate, but low 

sales per employee rates suggest that the District remains behind average sales patterns throughout the US, but on a par with the 

Appalachian region. Business out-migration rates are 0.5 percent from the 1996 pool of firms tracked, and 1.0 percent of survivors, somewhat 

high relative to other areas. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared 

differ by the number of area firms that ceased operations in the interim.

Construction firms reflect good job vitality rates, but sales vitality is low, as is sales per employee, suggesting a longer-term industry lag. Food 

products retention rates are low, but retained firms show high sales vitality and seem to be well-positioned in valued added and/or productivity 

with high sales per employee levels for the industry. Retained wood products and furniture firms indicate high vitality ratings in both sales and 

job vitality measures despite relatively low retention indices. Sales per employee rates in both industries are excellent. Retained chemicals 

firms are generally strong. Fabricated metals stands out as a top manufacturing performer in an industry with a sizeable number of firms, 

showing high retention rates coupled with leading sales change and job replenishment measures and higher than average sales per

employee rates among retained firms. While retained electronics firms score well in vitality measures including sales per employee ratings, 

retention rates are extremely low. Sales vitality and retention in communications are strong, but the industry appears to be just entering 

nationally competitive levels and continues to lag sales per employee ratings despite low job vitality measures. Technology-driven business 

services performance is strong across the board, matching good MSA vitality indices.

0.96 0.95

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1B

2001 firms analyzed: 8,057

Startups:

869

16.2%

0.83

197 88

85 43% 0.92

1,116,168 4,038,750 261.8% 2.15

7 16 129% 1.93

1,268 1,342 106% 1.27

186,028 269,250 45% 1.96

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,233 95 2.24% 0.98

5,297 35 0.91

5,898 19 0.32%

6,317 2 0.0300% 0.57

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,166 12 0.1900% 1.02

0.66%

0.81

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Aggregate startup activity rates are 17 percent behind national levels, and slightly behind the Appalachian Region. Startup survival rates are 

also disturbingly low – below both the Decatur MSA and Appalachian trends. The aggregate vitality performance of the small number of 

retained startups is, however, quite good, with leading scores in all job and sales vitality measures, as well as the sales per employee rate. 

Startup activity is strong among small trades contractors, but not the sector’s drivers, as well as wood products. By far, however, the District 

entrepreneurial engines appear to be in heavy manufacturing, where primary metals, fabricated metals, industrial machinery, electronics and 

transport equipment all indicate higher than average entrepreneurial activity rates, and instruments activity is on a par with US patterns. 

Communications, business and professional service activity rates are all low, further highlighting the leading role of manufacturing 

entrepreneurs.

While retention patterns are mixed, retained startups in primary metals, fabricated metals and industrial machinery all indicate high vitality 

levels in both sales and job measures – although it’s important to emphasize the small size of the sample. While business services startups 

struggled to maintain operations and failed more than usual, those which succeeded display high vitality ratings across the board (but low 

sales per employee levels).

Concentrations of high growth firms, which are the area’s most reliable engines in the absence of good entrepreneurial activity, are 

reasonable, lagging US patterns by only 5 percent. The District shows slightly leading concentrations in Class IV, firms which began with 

fewer than 50 jobs in 1996 and employed more than 100 by the beginning of 2001. But the handful of high growth firms overall, most of 

them small, should be developing in tandem with new growth from entrepreneurs – which is currently hard to see at the levels needed to 

generate substantial new vitality in the District.

Aggregate : All Classes 6,317 122 1.93% 0.95
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1C

2001 firms analyzed: 20,871

Retention:

16,914 8,463

8,410 50% 0.99

499,359 823,688 64.9% 1.28

13 17 31% 0.74

210,517 142,311 68% 0.88

71,337 102,961 44% 0.99

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.99 1.04

Retained Firms

US = 1.00

The Top of Alabama Regional Council of Governments covers ARC District 1C, including DeKalb, Jackson, Limestone, Madison and 

Marshall Counties. Both Madison and Marshall Counties are within the Huntsville AL MSA. The District shares some of the MSA’s impressive 

entrepreneurial vitality, but still lags behind the MSA’s scores in all summary measures except retention. 

Summary retention rates are 1 percent below US averages, matching the District’s retained firm sales per employee level. Very low startup 

survival rates are less of a concern than elsewhere due to above average entrepreneurial activity rates, although vitality measures among 

retained starts lag. Importantly, the District’s proportion of high growth firms not only lags US patterns by 23 percent, but is far behind rates in 

the Huntsville MSA, providing the potential for spin off and spillover benefits through marketing efforts.

The District’s summary retention index is just below US trends, but vitality ratings lag both the US and the nearby Huntsville MSA. High 

aggregate sales vitality ratings appear to have brought retained district business in line with national sales per employee patterns, suggesting 

positive performance in the future. Lower job vitality ratings may be a sign of some weakness – or of realignments to enhance productivity 

across the District. Business out-migration levels are a stable 0.3 percent of the 1996 pool of firms analyzed, and 0.6 percent of survivors, not 

a cause for undue concern.

Both retention and vitality rates in construction appear close to average in the construction sector, with low rates in some industries offset by 

others. Vitality indices in several non-durable industries appear to outpace durable goods – in food products, wood products, furniture, paper, 

chemicals and plastics. Heavier industries appear to have realigned, showing high levels of sales vitality but lower job measures – with 

continuing low sales per employee rates that may indicate that the process is not over. This trend includes the large number of retained firms 

(over 400) in primary metals, fabricated metals, industrial machinery, electronics and transport equipment. Instruments manufacturers reflect 

better job vitality ratings and a sales per employee rate only 9 percent below average for retained firms in the industry. Performance in 

technology-based services was mixed – poor in communications, with better experience in business services and leading rates in engineering 

and research, in line with expertise development throughout the Huntsville MSA.

0.99 0.77

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1C

2001 firms analyzed: 20,871

Startups:

2,860

20.3%

1.04

789 312

309 39% 0.84

436,610 839,223 92.2% 0.76

6 9 50% 0.75

4,935 2,652 54% 0.65

72,768 104,903 44% 0.76

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

10,435 189 1.81% 0.79

13,267 71 0.74

14,921 50 0.34%

15,884 1 0.0100% 0.11

'96 Firms in Class High Growth 96-01 % High Growth US Index

15,550 18 0.1200% 0.61

0.54%

0.85

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup activity is strong (4 percent above US averages and 17 points ahead of the Appalachian region), overall vitality of retained 

startups is not high. Aggregate retention rates are below US trends in every measurement category, including job and sales vitality and sale 

per employee among survivors. Retained startup vitality trends are, however, better than those in the MSA, and specific industries do reflect 

impressive ratings.

Startup activity rates are especially notable in agricultural services (14 percent above average), the construction sector (34 percent among 

special trades contractors) and a variety of light and heavy industries, including food products, wood products, stone-clay-glass, fabricated 

metals, transport equipment and instruments. Vitality of retained startups is particularly strong in wood products, transportation equipment 

and instruments. Technology services startups show less vitality, possibly as a result of strong competition. The five-year tracking method 

also excludes startups which began operations between 1997 and 2000.

Concentrations of high growth firms in the District lag those in the MSA. These figures also track firms operating 1996; the exclusion of 

newer firms likely depresses local figures here and in the MSA. However, the lag between the MSA and the District are real, and particularly 

noteworthy among smaller high growth firms – the ones most likely to come from the entrepreneurial population.

Aggregate : All Classes 15,884 249 1.57% 0.77
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1D

2001 firms analyzed: 8,248

Retention:

6,768 3,542

3,519 52% 1.03

490,623 833,693 69.9% 1.38

13 21 62% 1.48

85,063 72,624 85% 1.11

70,089 92,633 32% 0.89

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 0.94

Retained Firms

US = 1.00

The West Alabama Planning and Development Council covers ARC District 1D, including Bibb, Fayette, Hale, Lamar, Pickens and 

Tuscaloosa Counties. Tuscaloosa County is within the Tuscaloosa AL MSA. 

With the exception of overall retention, summary vitality rates in the District are significantly lower than the MSA. Retained firm sales per 

employee positioning is 89 percent of the national index, one point below Appalachia. Startup activity is 7 percent above the US average in 

the MSA, but 6 percent below in the District overall. (The District measure includes Tuscaloosa County, which elevates the District’s rate.) 

Startup retention rates are also lower in the District than the MSA (both below average, not a major concern for an area, like the MSA, with 

high activity rates). Finally, the high growth firm index in the MSA is 11 index points above the District, where the rating drops to 5 percent 

below national patterns – again, despite the elevating influence of Tuscaloosa County.

The issue for the District is internal – business out-migration rates are only 0.3 percent from the original 1996 group of firms tracked, 0.6 

percent of survivors. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differ by 

the number of area firms that ceased operations in the interim. Vitality measures of retained firms are high in aggregate, although not as high 

as rates in the MSA. But positive summary vitality rates in the District are in the context of sales per employee measures 11 percent below 

average, suggesting that high vitality ratings are an attempt to catch up rather than lead – while the MSA’s sales per employee rate is 2 

percent above US averages. 

The area’s most vital industries are those which reflect high vitality ratings coupled with strong sales per employee measures among retained 

firms. These include wood products, industrial machinery and instruments. Retained firms in food, plastics, primary and fabricated metals and 

transport equipment also indicate leading vitality ratings in at least one category and generally high retention rates. Communications and 

business services are weak although health and legal, as they are in the MSA’s scores, indicate high vitality measures.

0.89 0.95

0.80

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1D

2001 firms analyzed: 8,248

Startups:

979

18.3%

0.94

196 86

84 43% 0.92

455,556 642,308 41.0% 0.34

6 11 83% 1.25

1,208 914 76% 0.91

65,079 64,231 -1% 0.47

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,061 101 2.49% 1.08

5,202 31 0.82

5,893 19 0.32%

6,309 3 0.0500% 0.85

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,176 16 0.2600% 1.36

0.60%

0.81

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although higher than the Appalachian average, startup activity rates remain low enough to hurt (8 percent) below average – and clearly much 

lower in non-MSA counties within the district. Aggregate vitality scores for retained startups are low in most measures, particularly sales 

vitality and sales per employee.

Startup activity is strong in only a handful of industries, most of them comprised of a relative handful of firms, including textiles, apparel and 

plastics. Fabricated metals and instruments rate highly for startup activity, as does agricultural services, where startup retention and vitality 

among retained startups are poor. Business services startups (including computer-related) run 13 percent above average, although most 

professional services are lower. The value of industry breakdowns for retained startups is questionable due to the small number of firms 

involved.

High growth firm concentrations in the district lag national patterns by 5 percent and the Tuscaloosa MSA by 11 index points. The District 

shows high concentrations of growth firms in the smallest class, Class I, which is helpful in supplanting the gap in entrepreneurial activity. 

However, performance among middle and larger employment classes is slower, failing to compensate for the entrepreneurial gap. District 

efforts could look to the MSA’s strength to take advantage of expansion opportunities, working to fulfill their needs in outlying counties of the 

District.

Aggregate : All Classes 6,309 121 1.92% 0.95
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1E

2001 firms analyzed: 38,875

Retention:

34,766 17,620

17,504 50% 1.00

580,918 1,150,820 98.1% 1.93

13 19 54% 1.29

425,096 339,560 80% 1.04

82,988 115,082 39% 1.11

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.00 1.08

Retained Firms

US = 1.00

The Birmingham Regional Planning Commission covers ARC District 1E, including Blount, Chilton, Jefferson, St. Clair, Shelby and Walker 

Counties. All but Chilton and Walker are in the Birmingham MSA.

Summary vitality scores for the District are quite positive. To the extent that scores fall at or just below those of the MSA, lags seem to occur 

among small non-MSA counties. Retention rates are right at US levels, and retained firm sales per employee indicators lead US rates. 

Entrepreneurial activity remains high (8 percent above average, two points below the MSA). Startup survival rates dip below average, a 

common pattern among high activity areas. Finally, the concentration of high growth firms is actually slightly higher in the District than the 

MSA; the difference is concentrated in the smallest employment class of firms analyzed.

There is so much overlap between the MSA and the District that vitality rates are difficult to separate out. Like the MSA, the District indicates 

very high aggregate vitality ratings among retained firms – across the board and reinforced by leading sales per employee rates. Business outmigration from the District is at fairly standard levels – 0.3 percent from the original 1996 group traced for the analysis, and 0.7 percent of 

survivors. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the 

number of area firms that ceased operations in the interim.

The most consistent levels of vitality are in construction, apparel, wood products, primary metals and industrial machinery, all of which 

indicate good retention patterns, high vitality measures and correspondingly high sales per employee rates, suggesting that high vitality is 

leading, not just an effort to make up from lagging levels. Food products, furniture, electronics and instruments reflected some high vitality 

measures, but mixed retention and lower sales per employee indices. These scores indicate vitality, but at a less leading level. 

Communications performed at a reasonable level for vitality measures, but sales per employee ratings are low. Business services did 

somewhat poorly, mirroring the MSA.

1.11 1.02

0.90

0.95

1.00

1.05

1.10

1.15

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1E

2001 firms analyzed: 38,875

Startups:

5,406

21.1%

1.08

1,299 579

572 44% 0.94

602,863 1,416,766 135.0% 1.11

9 16 78% 1.17

10,931 9,241 85% 1.02

86,123 108,982 27% 0.79

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

21,124 545 2.58% 1.12

26,501 178 0.93

30,107 117 0.39%

32,505 18 0.0600% 0.99

'96 Firms in Class High Growth 96-01 % High Growth US Index

31,662 60 0.1900% 1.00

0.67%

0.98

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While lower than the MSA, District startup activity rates are still 8 percent above average. Startup rates among technology drive 

communications and business services industries are near average levels, but more focus here might result in enhanced industry 

performance overall. Notably, these industries had higher levels of startup activity in the MSA. Startup rates in almost every manufacturing 

industry are excellent, with particular emphasis on heavy industry and metalworking. Construction startups performed well in vitality measures 

over the analysis period. Retained startup vitality rates were excellent across the board and backed by average to high sales per employee 

rates in furniture, primary metals, fabricated metals and electronics. As in the MSA, retention rates among business services startups are 

relatively low, but vitality among retained firms in the industry lead national patterns in every measure except sales per employee.

Concentrations of high growth firms in the District are slightly above national levels, and particularly high among the smallest class of firms, 

possibly reflecting high vitality among District startups in specific industries. But even in larger employment classes, concentrations are at or 

approaching US averages – high for an ARC district. The District is successfully building on the strengths of the MSA, but outlying counties 

are still lagging.

Aggregate : All Classes 32,505 674 2.07% 1.02
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1F

2001 firms analyzed: 14,236

Retention:

12,551 6,448

6,413 51% 1.01

425,928 716,078 68.1% 1.34

11 15 36% 0.87

126,450 94,198 74% 0.97

70,988 89,510 26% 0.86

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.01 0.90

Retained Firms

US = 1.00

The East AL Regional Planning and Development Commission covers ten counties in ARC District 1F: Calhoun, Chambers, Cherokee, Clay, 

Cleburne, Coosa, Etowah, Randolph, Talladega and Tallapoosa. Etowah County is also in the Gadsden MSA, while Calhoun County is in the 

Anniston MSA.

District rates tend to reflect the lowest scores of each MSA linked to it. The District indicates the retention rate of Anniston (1.01); startup 

activity levels, at 0.90 only a point above Gadsden and well under Anniston’s 0.97 rating; startup survival rates between the two and a high 

growth index a low as Anniston’s in contrast to Gadsden’s slightly higher level and the much better Appalachian regional score. The District 

retained firm sales per employee rate is 14 percent below the national average, four index points behind Appalachia.

While the two MSAs linked to District 1F are important, the district is a much larger entity than either the Anniston or Gadsden MSAs, making 

the influence of MSAs one that conditions rather than determines. The District’s aggregate retention indices reflect high sales vitality and 

relatively low levels of job vitality among retained firms. In the face of this performance, the low retained firm sales per employee rate 

suggests originally sluggish positioning in 1996 from which the area has not fully caught up. The District’s business out-migration rate of 0.3 

percent is about average, and the 0.5 percent rate among surviving firms somewhat lower than most areas. While the number of migrant 

firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations 

in the interim.

Within their industries nationally, top vitality performers in the district include food products, wood products, furniture and motor freight, all of 

which reflected good vitality ratings within the context of high sales per employee rates among retained firms. Other industries indicated high 

vitality included textiles, printing, plastics, primary metals, industrial machinery, transport equipment and instruments, all of which reflected 

some high vitality ratings. Plastics, printing and instruments also showed high retention ratings. 

Although sales per employee levels among retained firms remain low, retained communications firms performed well in vitality indices as well 

as retention, leading US patterns in survival, sales and job vitality measures. Business and professional services did less well, mirroring 

experience in both the Anniston and Gadsden MSAs.

0.86 0.73

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1F

2001 firms analyzed: 14,236

Startups:

1,661

17.6%

0.90

335 142

142 42% 0.91

613,830 1,453,731 136.8% 1.12

13 14 8% 0.12

4,224 1,980 47% 0.56

102,305 132,157 29% 0.96

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

8,274 140 1.69% 0.74

10,132 52 0.71

11,121 27 0.24%

11,791 5 0.0400% 0.76

'96 Firms in Class High Growth 96-01 % High Growth US Index

11,561 15 0.1300% 0.68

0.51%

0.61

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Aggregate startup indices in the district are mixed. The startup activity rate falls 10 percent behind US patterns, but significantly ahead of 

most Appalachian areas. Vitality among startups suggest very positive sales vitality rates, and lagging job vitality, but the sales per employee 

measure (just 4 percent below average) suggests that sales growth essentially caught up to employee levels among retained startups over 

the analysis period. This is in contrast to experience in the MSAs, where job vitality among startups was high in Anniston and Gadsden sales 

per employee rates rose above the US average on the basis of high sales vitality. The district’s performance isn’t worse – just different. More 

concerning is the district’s lackluster startup survival rate, coupled with a below average startup activity index.

While startup activity was low overall in the district, leading performance was seen in a number of industries which scored highly on at least 

some vitality indices: food products, apparel, lumber, furniture, chemicals, plastics and transport equipment. Startup activity in fabricated 

metals was also high, and although the industry overall did not shine in retention vitality indices, it seems well position with a high sales per 

employee rate among retained firms (although retained startups lagged in the same measure). Other high startup activity industries tended to 

show at least some leading vitality scores as well, but with low sales per employee rates in all except furniture.

Startup activity rates in technology-driven communications and business services lagged national rates, but only by 5 percent-10 percent. 

While retention was above average in business services, retained startups did not register high on various vitality indices.

High growth firm concentrations are not the engines they should be in the district. Concentrations lag US and Appalachian regional patterns 

across the board, and trail MSA concentrations in various employment classes as well. While not always a problem, in the context of low 

entrepreneurial activity and survival rates and a retained business population which is doing better but still catching up, high growth firms 

which could have brought dynamism are sorely missed.

Aggregate : All Classes 11,791 174 1.48% 0.73
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1H

2001 firms analyzed: 1,820

Retention:

1,229 446

434 35% 0.70

296,505 501,152 69.0% 1.36

6 6 0% 0.00

7,435 2,786 37% 0.49

59,301 83,525 41% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.70 0.96

Retained Firms

US = 1.00

ARC District 1H is administered by the Central AL Regional Planning and Development Commission, covering Elmore County. Elmore is also 

part of the Montgomery MSA, accounting for more than 10 percent of its business establishments.

Startup activity rates and startup survival – both below national averages – are virtually the same in the District and the Montgomery MSA of 

which it is a part, However, district summary vitality rates are considerably lower than the MSA’s in both overall business retention and 

concentrations of high growth firms. Sales per employee ratings among retained firms lag US patterns by 20 percent.

The district’s aggregate retention rate is an unusually low 0.70, compared to the MSA rate, still low, of 0.92. While aggregate vitality scores 

among retained firms in the MSA more or less hold their own against national standards, they lag far behind in the district with the exception 

of sales vitality; however, it is clear that average sales patterns in the district are struggling to catch up to US average, placing the higher 

sales vitality rates in context. In fact, both the MSA and the district reflect quite low sales per employee measures. The tiny district 

experienced out-migration from only a handful of firms during the five-year analysis period – far from its biggest concern.

Retention vitality was low in the district. Only a few industries reflected vitality across the series of measures and these (paper, fabricated 

metals) involved only a handful of firms. In general, industries indicating high sales vitality rates also had very low sales per employee, 

indicating catch up efforts with industry averages – not a bad thing, but not leading activity, either. However, the Montgomery MSA of which 

Elmore County is part evidenced higher vitality ratings in fabricated metals, industrial machinery, electronics, transport equipment and 

instruments, and high retention rates (but not vitality measures) in communications. Investigation into creating benefits from these value 

added industries could pay off.

0.80 0.55

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1H

2001 firms analyzed: 1,820

Startups:

232

18.6%

0.96

43 20

19 44% 0.94

257,576 623,529 142.1% 1.17

5 4 -20% 0.00

193 75 39% 0.47

64,394 155,882 142% 1.13

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

888 13 1.46% 0.64

1,051 1 0.13

1,122 0 0.00%

1,161 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,146 0 0.0000% 0.00

0.10%

0.00

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity in the district was on a par with the MSA and higher than Appalachian regional patterns, although still lagging the US by 4 

percent. Sales vitality among retained startups was also strong, particularly noteworthy since the high retained startup sales per employee 

rate suggests that the sales vitality was a leading, not a catch-up position. However, the number of retained startups from the 1996 pool in the 

district is so small as to make the aggregate analysis open to question.

Startup activity rates were above industry averages in heavy construction and wholesale trades, and at national levels in communications. 

Specific manufacturing had high paper activity rates, but often with only one or two firms creating the “surplus” due to the small scale 

economy of the district.

Concentrations of high growth firms are very low, and non-existent in the three largest employment classes, Class III, IV and V. By contrast, 

MSA concentrations lag US trends but are considerably higher than in the district. MSA high growth concentrations lead national averages 

in the smallest employment class, Class I – probably among many of the MSA’s vital young firms, among the least likely to relocate or 

expand to new branches. Instead, the district can look to more mature MSA firms in industry reflecting high vitality indices to create spillover 

benefits.

Aggregate : All Classes 1,161 13 1.12% 0.55
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1I

2001 firms analyzed: 533

Retention:

421 183

181 43% 0.85

366,975 536,429 46.2% 0.91

12 12 0% 0.00

4,660 2,217 48% 0.62

61,163 67,054 10% 0.65

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.85 0.87

Retained Firms

US = 1.00

The South Central AL Development Commission covers a single county, Macon, in ARC District 1I. This ARC district has a small economy, 

making meaningful analysis difficult in more than aggregate scores. 

The district reflects very low overall retention rates, about 15 percent below average, coupled with low sales per employee positioning relative 

to both US and Appalachian trends. Conversely, startup summary survival rates are 1.19 in the index, significantly ahead of US patterns, 

even for an area, like this one, with a relatively low startup activity index (0.87). Concentrations of high growth firms are only slightly over onehalf of the US average.

Vitality scores among retained firms mirror the low rates developed in the retention index. Low sales vitality is compounded by very low sales 

per employee rates among retained firms. Both jobs change and replenishment indices rate far below US trends. Although the district’s small 

scale makes meaningful industry-specific analysis very difficult, there seems to be a hint of vitality among retained construction firms and their 

possible suppliers in the building materials retail industry (increasingly co-mingled with wholesale), and in trucking.

0.65 0.51

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Alabama 1I

2001 firms analyzed: 533

Startups:

59

17.0%

0.87

9 5

5 56% 1.19

100,000 700,000 600.0% 4.92

5 14 180% 2.70

36 69 192% 2.30

50,000 50,000 0% 0.36

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

270 3 1.11% 0.48

331 0 0.00

363 1 0.28%

390 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

385 0 0.0000% 0.00

0.00%

0.70

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are 13 percent below average. Retention and vitality of retained starts are extremely high, although patterns of retained 

firms are not very meaningful given the tiny scale of the sample involved. Notably, despite high sales and job change indices, the handful of 

retained startup firms tracked from 1996 evidence very low sales per employee rates, perhaps a more meaningful barometer of the local 

economy. Startup activity is high in a number of industries, including construction, trucking (which also showed some positive retention 

patterns) and business services – but again, the number of startups required to push indices above national averages is so small as to be 

almost meaningless.

High growth concentrations are extremely low in all classes, and only four high growth firms were identified in aggregate.

Aggregate : All Classes 390 4 1.03% 0.51
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2A

2001 firms analyzed: 15,358

Retention:

11,954 6,186

6,117 51% 1.02

432,891 641,131 48.1% 0.95

11 16 45% 1.09

129,308 100,058 77% 1.01

72,148 91,590 27% 0.88

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 1.03

Retained Firms

US = 1.00

ARC District 2A is administered by the Coosa Valley Regional Development Center, covering Bartow, Catoosa, Chattanooga, Dade, Floyd, 

Gordon, Haralson, Paulding, Polk and Walker Counties. Bartow and Paulding Counties comprise a small portion of the Atlanta MSA, while 

Catoosa, Dade and Polk fall within the Chattanooga TN MSA.

Solid vitality indications seem to be appearing in this ARC district, at least partially from the influence of the two related MSAs. Summary 

retention rates are 2 percent above average, and backed by generally positive performance in most retention vitality measures, although 

sales per employee rates lag 12 percent behind national averages, slightly lower than the Region. Entrepreneurial activity is high (3 percent 

above US patterns and much higher than in the Appalachian region overall). Startup activity is complemented by an above average startup 

survival rate. While the current proportion of high growth firms is 9 percent below the US average, solid job and sales vitality rates among 

retained firms may be compensating. Both startup activity and high growth firm concentrations are considerably higher in the vital Atlanta 

MSA, which should provide a source of future vitality for the district.

Higher than average aggregate retention scores are backed by leading ratings in both job change and replenishment measures, as well as a 

sales vitality score which is within 5 percent of the national average. The positive effect of these scores is somewhat diminished by low sales 

per employee ratings (88 percent of the US average) which suggest that the area is just now catching up with the positioning of firms across 

the nation. One concerning note: Business out-migration is relatively high, measuring 0.6 percent from the pool of 1996 firms tracked, and 1.1 

percent among survivors. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared 

differs by the number of area firms that ceased operations in the interim.

The district’s most consistently high job and sales change ratings among manufacturers are in furniture, plastics and fabricated metals, all of 

which combine high ratings across the board with high retained firm sales per employee rates, suggesting a leading edge in vitality patterns. 

Retention rates were, however, low in fabricated metals. Textiles, leather, electronics, transport equipment and instruments reflect more 

ambiguous vitality patterns, often positioned with weaker sales.

Retention levels in technology-driven communications were high, but sales and job change rates and survivor sales per employee were lower. 

Business services (including computer) reflected high retention and sales vitality rates, as well as a high survivor sales per employee index.

0.88 0.91

0.80

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2A

2001 firms analyzed: 15,358

Startups:

2,035

20.0%

1.03

401 194

192 48% 1.02

436,538 973,295 123.0% 1.01

8 15 88% 1.31

3,264 2,906 89% 1.07

72,756 108,144 49% 0.79

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

7,961 154 1.93% 0.84

9,624 77 1.11

10,516 40 0.38%

11,131 8 0.0700% 1.28

'96 Firms in Class High Growth 96-01 % High Growth US Index

10,903 20 0.1800% 0.97

0.80%

0.96

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity was very strong in construction, as were vitality rates among retained building construction firms. Among manufacturers, 

startup rates were above average in food products, lumber, fabricated metals and instruments. Although the sample is small, vitality rates for 

retained startups in fabricated metals and instruments appear particularly high, with good sales per employee rates among the fabricated 

metals firms as well.

Startup activity rates in motor freight and transport services were also quite high, although surviving startups did not do as well in vitality 

ratings. Following the pattern of the ratings for the industries overall, business services firms evidenced high startup rates and good sales per 

employee levels among retained startups. Startup rates among communications firms were sluggish.

High growth concentrations in the district were 9 percent below average, yet several points higher than overall Appalachian levels. Weak 

performance in the smallest employment classes dragged down the aggregate score, but Classes II, III, IV and V reflected concentrations 

near or above average levels. Thus, high growth firm concentrations probably have a significant impact on area employment levels. 

Assessed in combination with vitality levels among the high number of retained firms and excellent startup activity, vitality ratings suggest 

that this district is emerging as one of the recovering areas within the Appalachian region.

Aggregate : All Classes 11,131 206 1.85% 0.91
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2B

2001 firms analyzed: 18,075

Retention:

10,127 5,318

5,262 52% 1.03

507,213 744,872 46.9% 0.92

10 15 50% 1.20

97,348 80,111 82% 1.07

84,535 93,109 10% 0.90

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 1.14

Retained Firms

US = 1.00

ARC District 2B is administered by the Georgia Mountains Regional Development Center, covering Banks, Dawson, Forsyth, Franklin, 

Habersham, Hall, Hart, Lumpkin, Rabun, Stephens, Towns, Union and White Counties.

Like the Atlanta MSA which includes Forsyth County, the district’s high startup activity rate helps lead the way for area vitality. Supported by 

a summary retention score 3 percent above average, good job change scores and sales per employee positioning among retained firms right 

at the Appalachian index (90 percent of the US level), the district’s main weakness appears to be in a relatively small concentration of high 

growth firms.

The district’s above average retention index is the start of good news which extends into most vitality ratings for retained firms. Both job 

change and replenishment measurements rate highly; retained firm sales vitality over the five year period reviewed was lower than average by 

8 percent, accounting in large part for a sales per employee index among retained firms of 0.90 – about four points lower than the 

Appalachian average and substantially below the adjoining Atlanta MSA. Business out-migration tallied 0.6 percent of the 1996 pool of firms 

tracked and almost 1.1 percent of survivors – a relatively high rate for rural areas. While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Among manufacturers, the highest consistent vitality indices were found in paper products, fabricated metals and transport equipment, where 

retained firms scored well on all vitality categories while maintaining high sales per employee rates. But several other manufacturing 

industries scored well across multiple indices while often showing lower sales per employee rates: food products, apparel, wood products, 

chemicals, primary metals, industrial machinery and electronics. Plastics showed well in sales vitality and sales per employee measures, 

while vitality measures in agricultural services were high, as they were in motor freight transport.

Communications indicated low retention rates but good sales and job measures among retained firms – but with low survivor sales per 

employee rates at the end of the period. Vitality in the technology-driven business services industry was low. By contrast, both job and sales 

vitality rates and final retained firm sales per employee indices for communications and business services were very high in the Atlanta MSA. 

This District should look to “borrow and build” from Atlanta strengths where possible.

0.90 0.89

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2B

2001 firms analyzed: 18,075

Startups:

2,745

22.2%

1.14

402 183

179 45% 0.95

519,414 812,883 56.5% 0.46

6 13 117% 1.75

2,166 2,352 109% 1.30

86,569 81,288 -6% 0.59

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

6,582 134 2.04% 0.89

8,157 40 0.68

9,005 28 0.31%

9,504 6 0.0600% 1.13

'96 Firms in Class High Growth 96-01 % High Growth US Index

9,318 12 0.1300% 0.68

0.49%

0.78

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The district’s high level of entrepreneurial activity is evident across the board. Both agricultural services and the most important construction 

sector industries show high rates, as do a raft of basic and high technology-oriented manufacturing industries, including apparel, furniture, 

paper, printing, chemical, plastics, stone-clay-glass, primary metals and electronics. Motor freight startups are high, as are business services 

– but communications startups lag US trends. 

While job change rates are high among retained startups, sales vitality and current sales per employee indices among retained startups are 

considerably lower. Although Atlanta’s sale and sales vitality indices are higher, the patterns are similar. 

Even though final sales per employee rates among survivors are low, high vitality indices among retained starts are evident in textiles, 

apparel, metalworking industries including primary metals, fabricated metals and electronics, motor freight and wholesale durables. 

Communications and business services startups did not fare as well, although retention rates among communications startups are high.

Concentrations of high growth firms are below the US and Appalachian averages. In spite of this gap, solid job vitality scores among several 

industries, among both longer term firms and startups, underscores the basic solidity of economic vitality in the district. One source of 

opportunity might be encouraged by more attention to technology-driven service firms, industries which excel in the MSA.

Aggregate : All Classes 9,504 172 1.81% 0.89
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2C

2001 firms analyzed: 3,434

Retention:

2,543 1,296

1,281 50% 1.00

443,572 707,622 59.5% 1.17

11 15 36% 0.87

25,422 19,107 75% 0.98

73,929 101,089 37% 0.97

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.00 1.13

Retained Firms

US = 1.00

ARC District 2C is administered by the Chattahoochee-Flint Regional Development Center, covering Carroll and Heard Counties. Carroll 

County is covered by the Atlanta MSA.

This is a small district indicating reasonably high levels of vitality. Summary retention rates and sales per employee are right at the US 

average, and startup retention falls only a point below. The solid startup survival rate is significant despite the small size of the sample 

because of the district’s unusually high levels of startup activity, 13 percent above US trends and 26 index points higher than the 

Appalachian region. Both sales and job vitality rates for the small sample of retained startups are, however, disappointing. Although the 

number of firms involved is quite small, the proportion of high growth firms (close to US levels) no doubt compensate for some of the 

weakness.

Sales vitality is 17 percent above average, although sales per employee rates remain slightly below US standards, suggesting that firms in the 

area have recently ratcheted sales levels up to competition elsewhere. Job change rates are below average, but replenishment figures 

suggest good expansion activity in the district, which the high growth index supports. At 0.5 percent of 1996 firms and 1.2 percent of 

survivors, business out-migration is a concern, but one overshadowed by the district’s more positive ratings. While the number of migrant 

firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations 

in the interim.

The economic scale of this district is very small, making industry-specific sales difficult to assess meaningfully. Both paper and plastics 

industries appear to be high performers in the sales vitality indices as well as leaders in sales per employee rates, but each industry only 

maintains a handful of firms. Building construction also shows high sales and job indices across the board; its larger number of firms create a 

more valid assessment and an indication of confidence in ongoing local development. Fabricated metals and industrial machinery also 

indicate some high vitality measures, but retention and sales per employee rates among them are low. Communications firms are virtually 

absent, and business services rate highly for retention but low in vitality indices.

0.97 1.11

0.85

0.90

0.95

1.00

1.05

1.10

1.15

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2C

2001 firms analyzed: 3,434

Startups:

507

22.0%

1.13

86 41

40 47% 0.99

617,742 483,333 -21.8% 0.00

5 8 60% 0.90

453 311 69% 0.83

123,548 96,667 -22% 0.70

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,688 46 2.73% 1.19

2,046 10 0.68

2,241 7 0.31%

2,359 2 0.0800% 1.51

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,310 4 0.1700% 0.91

0.49%

0.79

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While the district’s startup rates are high, performance among the very small number of retained startup firms is extremely modest. Although 

startup survival rates are just below average, both sales and job measures are below US and Appalachian standards, some significantly. 

Sales vitality among retained startups is especially troublesome, intensifying the current low sales per employee rate among retained startups.

Startup activity is strong in agricultural services and construction. Most durable manufacturers reflect high industry startup activity rates, but 

the number of firms in each is very small. Among metalworking industries, startup rates in both industrial and transport machinery are high, as 

they are in motor freight. Following economy wide patterns in the district, business services startup activity is also high, but not so 

communications. Job and sales vitality scores among small numbers of retained startups are highest in building construction, industrial 

machinery and motor freight. Retention rates are very strong among business services starts – but again, the number of startup firms 

identified and analyzed is very small.

High growth concentrations are high, almost entirely due to leading rates in the smallest employment class, Class I. Rates in larger classes 

range as low as 68 percent of the national average. The small number of firms involved in this select group at high employment class levels 

makes meaningful analysis difficult.

Aggregate : All Classes 2,359 53 2.25% 1.11
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2D

2001 firms analyzed: 36,599

Retention:

18,344 8,276

7,918 43% 0.86

549,010 1,105,133 101.3% 2.00

11 16 55% 1.31

186,614 135,206 72% 0.94

91,502 138,142 51% 1.33

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.86 1.43

Retained Firms

US = 1.00

ARC District 2D is administered by the Atlanta Regional Commission, covering Cherokee, Douglas and Gwinnett Counties, all in the Atlanta 

MSA.

Although summary retention indices for both the general business population and startup firms are weaker than might be desired, the 

performance of retained firms, extraordinarily high entrepreneurial activity rates and leading concentrations of high growth firms create an 

extremely positive picture for this district – in many ways mirroring the MSA itself.

As they are in the Atlanta MSA, retained firm job and sales vitality ratings in the district are very high. Moreover, aggregate sales per 

employee indices, as they are in the MSA, are well above US averages, indicating high growth patterns and industry leading firms in the 

district as well as the MSA. However, the difference in retention patterns in the MSA and the district appear to be entirely attributable to high 

business out-migration from the district – 2.0 percent of firms from the 1996 pool, and 4.3 percent of survivors. It is also possible that changes 

in zip code patterns, common in high areas, distort the data in this measure. While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Retention vitality ratings are most consistently high among construction firms, and in wood, chemicals and industrial machinery within the 

manufacturing sector. All indicate high vitality in sales and job measures with leading sales per employee rates. Communications industries 

indicate lower retention rates, but very high job vitality. Wholesale trade, air and motor transport indicate high sales and job vitality rates. Fiveyear performance in technology-driven business services was not as impressive, but sales per employee remain at a high level. Other nonLDD sections of the MSA performed better in vitality measures and retained sales per employee ratings among technology-based services.

1.33 1.19

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2D

2001 firms analyzed: 36,599

Startups:

6,716

27.9%

1.43

883 358

326 37% 0.79

839,116 1,202,827 43.3% 0.36

8 12 50% 0.75

6,485 3,705 57% 0.69

104,890 120,283 15% 0.87

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

11,251 318 2.83% 1.23

14,150 122 1.19

16,029 74 0.46%

17,059 7 0.0400% 0.73

'96 Firms in Class High Growth 96-01 % High Growth US Index

16,692 33 0.2000% 1.04

0.86%

1.17

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Along with the performance of retained firms, startup activity is the high point of district performance. Startup rates are high in virtually every 

major industry, including technology based manufacturing (industrial machinery and electronics). In technology services, rates in 

communications, computer-driven business services and engineering and research were very high. Entrepreneurial activity in the entire FIRE 

sector boomed.

It is more difficult to pick out high vitality industries among retained startups; all vitality ratings tend to be lower.

High growth firms are a major component of district vitality, running more than 20 percent above national patterns in smaller employment 

classes and 19 percent overall. While it is obvious that many of the high vitality retained firms in the district are small and feed into these 

numbers, it is also likely that significant portions of the district’s entrepreneurial vitality create high growth startup firms which also appear 

here.

Aggregate : All Classes 17,059 412 2.42% 1.19
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2E

2001 firms analyzed: 4,539

Retention:

2,835 1,600

1,569 55% 1.10

960,763 502,516 -47.7% 0.00

10 13 30% 0.72

27,481 21,259 77% 1.00

160,127 83,753 -48% 0.81

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.85

Retained Firms

US = 1.00

The Northeast GA Regional Development Center covers four counties in ARC District 2E: Barrow, Elbert, Jackson and Madison. Barrow 

County is also in the Atlanta MSA.

Unlike other ARC districts touching the Atlanta MSA, District 2E displays the markings of a relatively slow economy, and appears to be 

benefiting only marginally from dynamic growth in the Atlanta MSA. As is the case in many sluggish rural areas, summary retention rates are 

high (10 percent above average), matching high startup rates. However, retained firm sales per employee and startup activity rates are low 

(yet higher than this pattern usually suggests in northern ARC districts), as are concentrations of high growth firms.

Despite a 10 percent advantage in the retention index, the District’s vitality rates are low with the exception of job replenishment. Current 

sales per employee levels among retained firms run 19 percent below the national level and considerably below Appalachian averages as 

well. These aggregate measures are a far cry from the Atlanta MSA. Business out-migration in the district is 1.1 percent of 1996 firms tracked 

for the analysis, and 1.9 percent of survivors, suggesting some concern, although absolute numbers are low enough to limit the value of the 

analysis. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the 

number of area firms that ceased operations in the interim.

Vitality rates (including current sales per employee) among retained firms are consistently high in a limited but interesting set of industries: 

chemicals, fabricated metals and industrial machinery. The high rates in metalworking suggest the potential for firms in industries traditionally 

compatible with more rural settings. Vitality rates in other industries are generally low, but the scale of the district constrains industry-specific 

analysis.

0.81 0.80

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2E

2001 firms analyzed: 4,539

Startups:

498

16.5%

0.85

109 55

54 50% 1.06

1,960,000 401,887 -79.5% 0.00

5 8 60% 0.90

515 406 79% 0.95

326,667 57,412 -82% 0.42

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,842 36 1.95% 0.85

2,287 13 0.79

2,508 6 0.24%

2,646 1 0.0400% 0.68

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,595 2 0.0800% 0.41

0.57%

0.60

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

In contrast to the linked Atlanta MSA, startup activity rates are low, about 15 percent below average, and slightly less than Appalachian 

regional levels. Startup survival rates are above average, but this is not necessarily a sign of meaningful vitality in areas with low 

entrepreneurial activity. While the number of retained starts from the 1996 pool severely limits industry specific analysis, it is clear from 

aggregate numbers that vitality among them is low; vitality measures are all below average, and sales vitality is especially low, depressing the 

sales per employee rate among surviving starts to less than half of the national level.

Startup activity is high in building construction, wood products, fabricated metals and motor freight, and low in almost all other industries. 

Some, like electronics, indicate high activity rates, a good sign, but industry scale is so small that it’s hard to draw meaningful conclusions.

While high growth firms certainly enhance vitality in the district, their place is not as substantial as at national levels, which run 20 percent 

higher overall – and more in some larger employment classes. The lag in high growth firms among the retained business population acts as 

compensation for slow economies in some ARC districts – but the presence is less weighty here.

Aggregate : All Classes 2,646 43 1.63% 0.80
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2F

2001 firms analyzed: 6,920

Retention:

5,512 3,030

2,998 54% 1.08

650,741 911,478 40.1% 0.79

15 20 33% 0.80

77,736 59,851 77% 1.00

92,963 101,275 9% 0.97

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.79

Retained Firms

US = 1.00

The North GA Regional Development Center covers Fannin, Gilmer, Murray, Pickens and Whitfield Counties in ARC District 2F: Pickens 

County is also in the Atlanta MSA.

The district appears to be benefiting only marginally from dynamic growth in the Atlanta MSA. Most noticeably, startup activity rates are low, 

and startup retention only average (overall retention rates run about 8 percent higher than the US average). Vitality measures among 

retained firms and the small group of retained startups appears relatively weak in aggregate, although retained firm sales per employee 

outpaces Appalachian rates. A cadre of high growth firms in relatively large concentrations is probably leading vitality in the district.

Aggregate retention rates are high, as is common in sluggish economies. More tellingly, job and sales change measures are low, although 

better job replenishment ratings suggest expansions consistent with high growth concentrations in the district. Sales per employee rates 

among retained firms are below average, but only by 3 percent -- slightly above the Appalachian average. Business out-migration stands at 

0.6 percent of the 1996 tracked pool of firms – and 1.1 percent of survivors, relatively high rates. While the number of migrant firms is the 

same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the 

interim.

No valued-added industries attain high vitality ratings across the board – social services and personal services come closest, including high 

sales per employee indices. The large textile industry indicates good positioning with high sales per employee among retained firms. The 

motor freight industry rates well overall, and a number of manufacturing industries score above average in one or two vitality indices: food 

products, furniture, primary metals and instruments. The transport services industry indicates some vitality, and retention rates and sales 

vitality in communications are good.

0.97 1.09

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Georgia 2F

2001 firms analyzed: 6,920

Startups:

731

15.4%

0.79

224 109

105 47% 1.00

862,987 973,000 12.7% 0.10

22 13 -41% 0.00

4,825 1,359 28% 0.34

123,284 121,625 -1% 0.88

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,375 88 2.61% 1.13

4,225 23 0.75

4,741 20 0.42%

5,114 2 0.0400% 0.70

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,985 10 0.2000% 1.06

0.54%

1.06

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Lagging startup rates spill over into the experience of retained startup firms; startup survival is average in aggregate, but vitality rates and 

sales per employee among survivors are low. Startup activity rates are high in furniture, plastics, electronics, and motor freight, and near US 

averages in industrial machinery, but the scale of several industries is too small to give much weight to the results. In aggregate numbers, it is 

worth noting that sales per employee rates among retained starts are higher than other vitality indices.

This is confirmed by a look at specific industries, where retained startups appear to lag in vitality measures. However, above average sales 

per employee are indicated, suggesting good positioning. These firms could be the growth engines for the district’s future.

Some of the well-positioned retained startups discussed in the last section are probably already populating the district’s high growth firm 

concentrations, which are best (13 percent above average) in the smallest employment category, Class I. These 113 firms may well be 

among the district’s best near term opportunities to increase economic vitality overall.

Aggregate : All Classes 5,114 113 2.21% 1.09
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3A

2001 firms analyzed: 910

Retention:

654 382

376 58% 1.14

445,677 620,134 39.1% 0.77

8 10 25% 0.60

4,923 3,603 73% 0.95

89,135 103,356 16% 0.99

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.14 0.57

Retained Firms

US = 1.00

ARC District 3A is administered by the Buffalo Trace Area Development District, including Fleming and Lewis Counties. 

This very small district indicates a generally familiar pattern among more rural ARC districts with lackluster economies, including high overall 

retention rates coupled with low vitality measures in all other areas – startup activity, retention rates for startup firms and low concentrations 

of high growth firms. In a fairly unusual twist, this District also indicates a solid overall sales per employee rating.

The scale of the district economy makes the value of business out-migration patterns hard to assess, but the area seems to indicate business 

out-migration levels somewhat higher than the norm; 0.9 percent from the pool of 1996 firms tracked and 1.6 percent of survivors from that 

group. This is a very small scale indication, but may point to problems in a lagging economy. While the number of migrant firms is the same in 

both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

While the high overall retention rate appears impressive at 14 percent above average, it can also be a sign of economic turgidity. In this case, 

that view is supported by low job vitality measures among retained firms. Sales per employee rates among retained firms are slightly better. 

Although the number of firms is so low as to diminish the value of industry-specific analysis, several industries indicate one or more higher 

vitality measures of various types: agricultural services, food products, plastics, stone-clay-glass, industrial machinery, motor freight and even 

communications.

0.99 0.79

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3A

2001 firms analyzed: 910

Startups:

74

11.1%

0.57

13 5

5 39% 0.82

280,000 620,000 121.4% 1.00

3 6 100% 1.50

43 28 65% 0.78

70,000 103,333 48% 0.75

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

453 7 1.55% 0.67

552 4 1.00

598 1 0.17%

627 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

617 0 0.0000% 0.00

0.72%

0.42

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are only two-thirds of the US average, and substantially below regional averages. Only a handful of retained startups 

could be identified from the 1996 pool, although these seemed to indicate reasonably solid sales vitality and average job vitality rates among 

them (but lower current sales per employee than average).

Startup activity seems to be most pronounced in construction and various retail industries. In larger settings these can often indicate 

development and confidence – but in slow economies they can also suggest relatively low-key startup business efforts for those unable to find 

wage employment.

High growth firm concentrations are 21 percent lower than average and non-existent in higher employment classes. Data for Class II firms is 

indicated at average levels.

Aggregate : All Classes 627 10 1.59% 0.79
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3B

2001 firms analyzed: 4,396

Retention:

3,950 2,189

2,172 55% 1.09

440,580 672,466 52.6% 1.04

10 14 40% 0.96

38,441 30,141 78% 1.02

73,430 96,067 31% 0.92

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.80

Retained Firms

US = 1.00

ARCD District 3B is administered by the FIVCO Area Development District, including Boyd, Carter, Elliott, Greenup and Lawrence Counties. 

Boyd, Carter and Greenup Counties are also within the Huntington MSA.

With variations in specific numbers, the district seems to follow many of the economic patterns set in the MSA. Overall retention rates are 

high, coupled with solid retention vitality and sales per employee indices. Startup activity is considerably weaker – in fact, weaker in the 

district than in either the MSA or the Appalachian Region. The vitality lag resulting from the lack in entrepreneurship is partially compensated 

by slightly higher than average concentrations of high growth firms.

All categories of vitality ratings among retained firms are reasonably good. High retention rates are complemented by leading sales and job 

replenishment measures among retained firms, and change in average job numbers among survivors only about 5 percent below average. 

Current retained firm sales per employee is about 8 percent below average – not bad for an area within the Appalachian Region. Over the fiveyear analysis period, business migration was 0.4 percent of the original pool of firms tracked, and 0.8 percent of survivors, not a serious 

cause for concern. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by 

the number of area firms that ceased operations in the interim.

Retained firms in food products, furniture and chemicals indicate across leading sales and job vitality measures as well as high current sales 

per employee rates among retained firms. Several other industries, including building construction, wood products, plastics, fabricated metals 

and transport equipment indicate multiple high vitality measures but current positioning (sales per employee) which is not as impressive. The 

MSA appears to show high vitality ratings among most significant non-durable manufacturing industries, including foods and wood products, 

apparel, furniture, chemicals and plastics. The MSA’s sales per employee positioning indicator is generally higher in these industries as well.

0.92 1.02

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3B

2001 firms analyzed: 4,396

Startups:

449

15.6%

0.80

110 52

51 46% 0.99

520,313 791,304 52.1% 0.43

6 9 50% 0.75

622 449 72% 0.87

74,330 87,923 18% 0.64

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,556 65 2.54% 1.11

3,165 19 0.83

3,505 12 0.34%

3,725 1 0.0300% 0.48

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,659 6 0.1600% 0.86

0.60%

0.86

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The combination of the limited scale of the district economy and low startup rates leave only a small number of retained startups to assess for 

vitality, and measures are uniformly low among their aggregate scores (except startup retention itself). However, the very small numbers of 

startups from 1996 showed at least one leading vitality rate each in both construction and industrial machinery. Industry scale constrained 

efforts to assess startup activity, but rates in construction and industrial machinery appear high, coupled with near-average startup levels in 

trucking.

Concentrations of high growth firms were 2 percent above average in aggregate, and very concentrated in the Class I ratings, the smallest 

employment group. In conjunction with entrepreneurial activity and vitality ratings, this suggests a concentration of small, longer-term firms 

which have just begun to experience growth. Enhancing technical assistance to these firms as they try to manage new challenges might 

prove to be a useful allocation of development resources.

Aggregate : All Classes 3,725 77 2.07% 1.02
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3C

2001 firms analyzed: 5,645

Retention:

3,849 2,278

2,258 59% 1.16

409,322 653,833 59.7% 1.18

11 16 36% 0.87

40,563 34,878 86% 1.12

68,220 81,729 20% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.16 0.86

Retained Firms

US = 1.00

ARC District 3C is administered by the Bluegrass Area Development District, including Clark, Estill, Garrard, Lincoln, Madison and Powell 

Counties. Clark and Madison Counties are included in the Lexington MSA.

Summary patterns in the district are considerably weaker than in the related MSA. While retention levels are high in both, the MSA’s sales 

per employee rate for retained firms is somewhat higher. As well, the MSA’s startup activity rate of 0.91 is five index points above the District, 

which is close to the (lower than US) Appalachian average. Startup survival rates are good in both areas. However, the MSA’s commanding 

concentration of high growth firms dwarfs the districts ratings, which are 15 percent below US averages and, at 0.87, twenty-two index points 

below the MSA. The Appalachian region’s indexed high growth firm concentration is 0.90.

Vitality measures among the district’s retained firms are generally solid, with above average ratings in retention, sales vitality and job 

replenishment. Aggregate sales per employee rates remain low, lower than levels in both the Appalachian region and the Lexington MSA. 

Business out-migration levels stand at 0.5 percent from the pool of firms tracked from 1996, and 0.9 of survivors, somewhat above average 

levels. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the number 

of area firms that ceased operations in the interim.

Vitality ratings stand out in all measures in the fabricated metals industry, which indicates leading measures in all categories including current 

sales per employee positioning. An impressive number of other manufacturing industries show high vitality ratings in multiple categories, 

although final sales per employee positioning among retained firms is not as high: food products, apparel, wood products, plastics, stone-clayglass, primary metals, industrial machinery, electronics and transport equipment. (Some of these indicate only a handful of firms for analysis.)

0.79 0.85

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3C

2001 firms analyzed: 5,645

Startups:

635

16.7%

0.86

139 68

67 48% 1.03

1,169,565 845,161 -27.7% 0.00

6 11 83% 1.25

766 731 95% 1.15

167,081 84,516 -49% 0.61

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,493 46 1.85% 0.80

3,098 15 0.67

3,417 15 0.44%

3,654 3 0.0800% 1.47

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,571 10 0.2800% 1.47

0.48%

1.11

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are high in some of the same industries evidencing high retained firm measures – a positive sign. These include food 

products, lumber, plastics, fabricated metals and transport equipment. Motor freight startup scores are high, as are technology-driven 

communications and business services, which did not show well in summary vitality indices. With the notable addition of electronics, these 

tend to be the same industries which reflected high startup activity rates in the MSA. 

Retained startups from the 1996 pool were quite small in number, making industry-specific analysis very difficult. However, there were 

positive indications in both plastics and business services. In aggregate, retained startups evidenced high retention and job vitality measures, 

with weaker results in sales vitality and current sales per employee positioning. This is in some contrast to much higher sales vitality scores 

among retained startups in the MSA, and may contribute to the extreme difference in concentrations of small high growth firms.

Combined lags in entrepreneurial activity and concentrations of high growth firms hold back progress in the district in spite of relatively solid 

performance among retained firms in a variety of important industries. In contrast to the MSA, concentrations of high growth firms trail 

especially in smaller employment classes, underscoring entrepreneurial weaknesses.

Aggregate : All Classes 3,654 63 1.72% 0.85
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3D

2001 firms analyzed: 2,487

Retention:

1,941 1,122

1,111 57% 1.14

409,974 505,841 23.4% 0.46

9 13 33% 0.80

16,286 13,840 85% 1.10

81,995 84,307 3% 0.81

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.14 0.77

Retained Firms

US = 1.00

ARC District 3D is administered by the Gateway Area Development District, encompassing Bath, Menifee, Montgomery, Morgan and Rowan 

Counties.

This district reflects summary vitality patterns common to many lower-level economies. Retention rates are quite high, both among firms 

overall and startups tracked from 1996. However, job and sales change rates among retained firms, as well as the retained firm sales per 

employee indicator, are well below US averages. Startup activity rates are almost one-quarter below US levels and lag Appalachian averages 

as well. Concentrations of high growth firms trail both US and Appalachian patterns.

While overall retention rates are high, job and sales change indicators for retained firms are much lower, lagging significantly while sales per 

employee rates among retained firms is about 19 percent below average. Job replenishment rates are, however, positive, suggesting some 

expansion activity or the retention of larger firms from the 1996 pool. Among value-added industries, only wood products appears to have 

leading indicators across all vitality measures, including retained firm sales per employee ratings. Other industries that do reflect specific high 

measures, include building construction, paper products, industrial machinery, instruments, motor freight and communications, which also 

indicates a high sales per employee score. (The scale of several of these industries is quite small). Business out-migration rates are 0.6 

percent from the 1996 pool of firms tracked, and 1.0 percent of survivors; this is relatively high, but inconclusive given the small scale of the 

district economy. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by 

the number of area firms that ceased operations in the interim.

0.81 0.85

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3D

2001 firms analyzed: 2,487

Startups:

251

15.1%

0.77

58 29

29 50% 1.07

730,000 1,125,000 54.1% 0.44

5 10 100% 1.50

294 274 93% 1.12

121,667 112,500 -8% 0.82

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,282 27 2.11% 0.92

1,573 6 0.53

1,755 4 0.23%

1,853 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,823 1 0.0500% 0.29

0.38%

0.58

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although the limited sample of startups suggests high retention rates, startup activity itself is ten index points below the Appalachian regional 

average and 23 percent below US patterns. There appear to be relatively strong startup activity patterns in metalworking industries. (The 

small number of establishments in these industries emphasizes the value of even a single startup.) Motor freight startup rates are high, and 

business services startups are not far below national averages (again, the number of firms overall is small, increasing the statistical impact of 

even minimal startup activity).

Retained startups indicate low sales vitality and low sales per employee (20 percent below average) but good job vitality. Startups in a number 

of retail industries appear to be the leading performers, although the absolute number of retained startups is so low as to make specific 

analysis difficult.

Concentrations of high growth firms are low across the board, below US and Appalachian averages in every employment class examined. In 

the absence of high entrepreneurial vitality rates, targeted technical assistance to industries showing high vitality measures might enhance 

economic centers of activity in the district.

Aggregate : All Classes 1,853 32 1.73% 0.85
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3E

2001 firms analyzed: 4,921

Retention:

4,619 2,260

2,237 48% 0.96

456,532 751,689 64.7% 1.28

8 12 50% 1.20

36,355 26,521 73% 0.95

76,089 93,961 24% 0.90

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.96 0.71

Retained Firms

US = 1.00

ARC District 3E is administered by the Big Sandy Are development District, including Floyd, Johnson, Magoffin, Martin and Pike Counties.

This is one of the relatively scattered ARC districts which reflect vitality levels below US and Appalachian averages in every summary 

measure. Retention rates are, however, only 4 percent below the US average and vitality among retained firms is solid, even leading in some 

categories. The sales per employee indicator is right at the Appalachian average (90 percent of the US). High growth firm concentrations are 

low, but only two index points below the ARC average. The combination of very low startup activity and survival rates is most troubling 

among the area’s summary measures, especially when low vitality of retained firms is factored in.

Mildly high rates of business out-migration (0.5 percent of firms from the 1996 pool tracked, 1.0 percent of survivors) are more of a concern in 

the context overall low retention in the area (12 index points behind the Appalachian average in a district which cannot claim high levels of 

entrepreneurial activity). While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared 

differs by the number of area firms that ceased operations in the interim. Although both sales and job vitality figures appear high, these (and 

sales per employee) are significantly distorted by correspondingly high levels in the large coal mining industry. Other industries reflect almost 

uniformly low vitality ratings; transportation equipment and stone-clay-glass, another resource based industry, are the only notable exceptions. 

No industries (including coal mining) achieve leading measures across the board.

0.90 0.88

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3E

2001 firms analyzed: 4,921

Startups:

448

13.8%

0.71

122 38

38 31% 0.67

575,385 684,375 18.9% 0.16

5 6 20% 0.30

593 224 38% 0.45

95,897 97,768 2% 0.71

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,910 63 2.16% 0.94

3,588 15 0.58

4,004 9 0.22%

4,268 2 0.0500% 0.84

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,184 5 0.1200% 0.63

0.42%

0.57

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are very low, as is startup survival. Higher relative levels of (still small scale) startup activity were experienced in the 

metalworking group, including fabricated metals, transport equipment and some miscellaneous manufacturing. Although startups related to 

coal mining appeared to develop high sales vitality indices, there were too few retained startups to develop other industry-specific analyses. 

All (aggregated) vitality and sales per employee indices for retained startups were below both US and Appalachian averages.

Concentrations of high growth firms were highest among the smallest employment class analyzed, Class I. Identifying and capitalizing on 

the value-added firms in this group is likely the quickest route to develop new economic generators for the district economy, and one likely 

means to spur additional and badly needed entrepreneurial vitality.

Aggregate : All Classes 4,268 76 1.78% 0.88
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3F

2001 firms analyzed: 5,896

Retention:

4,266 2,312

2,295 54% 1.07

387,954 586,860 51.3% 1.01

11 15 36% 0.87

45,233 34,743 77% 1.00

64,659 73,357 14% 0.71

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.07 0.65

Retained Firms

US = 1.00

ARC District 3F is administered by the Lake Cumberland Area Development District, and includes Adair, Casey, Clinton, Cumberland, 

Green, McCreary, Pulaski, Russell and Wayne Counties.

While summary retention rates in this district are 7 percent above the US average, startup activity and survival trails both US and 

Appalachian patterns. Lagging vitality is also reflected in the District’s very low retained firm sales per employee index. However, 

concentrations of high growth firms are at Appalachian levels (0.90 or ten per cent below US norms) and lead the Region in one employment 

class. Aggregate vitality measures among retained firm overall is solid, but very poor among retained startups.

Unfortunately, the district’s relatively high vitality measures among retained firms is coupled with a low average sales per employee rate 

suggesting a continuing lag in dynamism, despite a five-year pattern of progress. At 0.4 percent of the 1996 pool of firms tracked and 0.7 

percent of survivors, business out-migration is more or less at normal levels. While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Among retained firms, only the motor freight industry scored well in all vitality measures while demonstrating a high sales per employee rate 

among surviving firms. Retained firms in agricultural services, and the very small number of retained plastics and electronics firms, also 

indicate good sales per employee positioning. Other strong vitality indicators were also evident in specific categories among firms in 

agricultural services, building construction, wood products, furniture, printing, stone-clay-glass, fabricated metals, industrial machinery and 

transport equipment. Communications, business and professional services (except legal) seem to have lagged US patterns substantially.

0.71 0.90

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3F

2001 firms analyzed: 5,896

Startups:

530

12.7%

0.65

105 48

47 45% 0.96

511,268 530,233 3.7% 0.03

5 8 60% 0.90

533 381 71% 0.86

102,254 75,748 -26% 0.55

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,787 54 1.94% 0.84

3,420 25 1.01

3,781 14 0.37%

4,007 1 0.0200% 0.45

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,925 6 0.1500% 0.80

0.73%

0.93

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are extremely low – less than two-thirds of the US average and twenty-two index points behind the Appalachian region – 

and retained startups are too few to assess meaningfully at most industry-specific levels. Aggregate startup retention and vitality rates are all 

low, below US and Appalachian averages. Sales vitality and sales per employee are of particular concern; the latter lags 45 percent below the 

US average.

Startup activity rates are high in primary metals, transport equipment and miscellaneous manufacturing, but very low among other 

manufacturing industries, communications and business services. The very small number of retained starts in transport equipment and 

miscellaneous manufacturing indicate some leading scores in various vitality ratings, but relatively low sales per employee for their industries.

Aggregate concentrations of high growth firms are generally at the Appalachian average, about 10 percent below the US level. However, the 

district’s high growth concentration is slightly above norm in Class II, firms which began the analysis period with fewer than 10 jobs and grew 

to more than 25 over five years. The solid number of firms in this and, slightly less so, the Class III category may provide future dynamism 

to a district lacking in entrepreneurial vitality.

Aggregate : All Classes 4,007 73 1.82% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3H

2001 firms analyzed: 6,832

Retention:

6,032 3,240

3,204 53% 1.05

454,667 598,816 31.7% 0.63

10 14 40% 0.96

58,459 45,973 79% 1.02

75,778 85,545 13% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.05 0.73

Retained Firms

US = 1.00

ARC District 3H is administered by the Cumberland Valley Area Development District, including Bell, Clay, Harlan, Jackson, Knox, Laurel, 

Rockcastle and Whitley Counties.

Summary indices indicate patterns similar to other sluggish Appalachian economies, including relatively high retention and startup retention 

rates coupled with low levels of startup activity and skimpy concentrations of high growth firms. With the exception of scores for the startup 

retention index which match the Region’s, the District trails Appalachia in every summary measure, including a low sales per employee index 

among retained firms.

Despite high overall retention rates, sales vitality scores among retained firms are very low. While job change scores hover around average, 

this may not be entirely a good thing given the lag in sales vitality and, as importantly, in the current sales per employee index for retained 

firms. At 0.6 percent from the pool of 1996 firms tracked and 1.1 percent among survivors, business out-migration is relatively high, indicative 

of larger concerns. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by 

the number of area firms that ceased operations in the interim.

Among substantial industries in the area, only the resource-based stone-clay-glass industry shows high vitality ratings in all indices including 

current sales per employee – and in this industry retention rates were relatively low. High sales vitality in building construction suggests some 

improved (but still lagging) positioning among industry firms. Furniture and plastics industries indicate high vitality ratings across the board in 

spite of low retained sales per employee rates. Vitality ratings are more mixed but with positive indicators in wood products, primary and 

fabricated metals and trucking. Surprisingly, sales vitality among retained firms is high in communications, while job vitality indicators are 

good in business services. Both, however, maintain very low sales per employee positioning.

0.82 0.77

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3H

2001 firms analyzed: 6,832

Startups:

662

14.2%

0.73

142 68

68 48% 1.02

377,922 824,194 118.1% 0.97

6 9 50% 0.75

782 616 79% 0.95

75,584 103,024 36% 0.75

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,762 72 1.91% 0.83

4,723 34 0.99

5,283 19 0.36%

5,643 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,532 8 0.1400% 0.76

0.72%

0.91

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are extremely low in the district – more than one-quarter below US averages and twelve index points below trends in the 

Appalachian Region. At the same time, startup retention is above average (not unusual in low activity areas). More significantly, retained 

startup sales per employee rates are quite low. 

Startup activity rates are at or above average in agricultural services, coal mining related industries and building construction. Several 

manufacturing industries – furniture, rubber, transport, instruments – indicate high rates, but the industries appear very small. Startup activity 

in value added services – communications, business services, engineering and research – is quite low.

All vitality measures among retained startups trail US patterns, but are within 5 percent in both sales and job replenishment ratings. Although 

the small number of retained firms constrains industry analysis, wood products, printing and fabricated metals indicate some high vitality 

ratings coupled with lagging sales per employee positioning. Business services indicates high sales per employee rates, probably due to a 

single large data processing firm.

Concentrations of high growth firms are below average in all employment classes analyzed, but only 1 percent under US norms in Class II, 

firms which began the analysis period with fewer than 10 firms and grew to more than 25 over the five years tracked. This group of 72 firms 

could well form the nucleus of future growth in the absence of a sufficient ongoing core of entrepreneurial vitality.

Aggregate : All Classes 5,643 88 1.56% 0.77
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3I

2001 firms analyzed: 3,162

Retention:

2,884 1,555

1,533 53% 1.06

369,849 586,860 58.7% 1.16

8 12 50% 1.20

23,123 18,356 79% 1.03

73,970 73,357 -1% 0.71

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.63

Retained Firms

US = 1.00

ARC District 3I is administered by the Kentucky River Area Development District, encompassing Breathitt, Knott, Lee, Leslie, Letcher, 

Owsley, Perry and Wolfe Counties. 

Summary vitality measures in this small district are lackluster. High retention levels, as is often the case in ARC districts, mask low levels of 

startup activity and low concentrations of high growth firms. In this district, startup survival rates are also low, as are vitality measures among 

retained startups. Overall retained firm vitality measures are much higher, but current sales per employee positioning is far behind average 

levels of both the US and the Appalachian region.

While retention rates and vitality measures are good in a relative sense, they also obscure rather low absolute figures. Snapshots of average 

firm employment and sales are well below US averages, providing important context for vitality measures. In addition, sales per employee 

levels remain less than three-quarters of the US average among retained firms. Business out-migration rates of 0.8 percent from the 1996 

pool and 1.4 percent of survivors suggest a high level of relocation from the area. (While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.) 

Nevertheless, the retained firm vitality measures do suggest improvement that should not be overlooked.

Not a single industry for which individual data was available demonstrates high across the board vitality scores. However, some strong vitality 

measures (and low sales per employee positioning) are evident in building construction, apparel, wood products, industrial machinery and 

even business services.

0.71 0.78

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3I

2001 firms analyzed: 3,162

Startups:

255

12.3%

0.63

61 19

18 30% 0.63

477,778 294,118 -38.4% 0.00

6 10 67% 1.00

345 183 53% 0.64

68,254 29,412 -57% 0.21

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,835 30 1.63% 0.71

2,262 12 0.73

2,524 8 0.32%

2,701 1 0.0400% 0.66

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,646 4 0.1500% 0.80

0.53%

0.80

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is very low, and equally low levels of startup retention don’t help. Moreover, aggregate levels of vitality among the district’s 

handful of retained startups from 1996 are all far under US and Appalachian levels with the exception of average retained startup job change, 

which is average. However, the scale of survivor startup firms is only two-thirds of the national average. and smaller than the average retained 

Regional startup as well.

Startup rates lag in every significantly scaled industry in the district except construction and industrial machinery. The population of retained 

startups is too small to develop meaningful industry-specific analysis.

High growth firm concentrations are low in all employment classes analyzed, and do not range above 80 percent of the US average in any 

category. Aggregate rates are twelve index points behind the Appalachian region. In no segment do high growth firm concentrations indicate 

a trend large enough to capitalize upon.

Aggregate : All Classes 2,701 43 1.59% 0.78
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3J

2001 firms analyzed: 503

Retention:

445 253

245 55% 1.09

516,193 1,040,107 101.5% 2.00

10 13 30% 0.72

4,334 3,365 78% 1.01

86,032 148,587 73% 1.43

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.42

Retained Firms

US = 1.00

ARC District 3J is administered by the Barren River Area Development District. It includes a single county, Monroe.

This district is so small as to make any conclusive analysis difficult. The summary retention index is well above average, as is startup 

retention – but number of identified retained firms is tiny. High growth firm concentrations are very small.

Retention rates are high, and most vitality indices suggest high growth, but these appear to be a reflection of the scale of the district, including 

relatively outsize wood products, industrial machinery, wholesale and health services firm sales which distort economy wide numbers. 

Notably, job growth vitality is quite low despite average retained firm size which is also below average.

1.43 0.36

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Kentucky 3J

2001 firms analyzed: 503

Startups:

30

8.2%

0.42

5 4

4 80% 1.71

225,000 375,000 66.7% 0.55

4 7 75% 1.13

18 26 144% 1.74

56,250 53,571 -5% 0.39

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

313 3 0.96% 0.42

361 0 0.00

391 0 0.00%

411 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

399 0 0.0000% 0.00

0.00%

0.00

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is to too low to be assessed meaningfully at industry-specific levels, and trails far behind US and Appalachian patterns in 

aggregate. The few retained startups analyzed are in high value professional or high volume retail industries, skewing retained startup vitality 

numbers.

Concentrations of high growth firms are very low, and non-existent in employment categories larger than Class I (firms which began with 

fewer than five employees and grew to more than ten).

Aggregate : All Classes 411 3 0.73% 0.36
ARC Firm Formation and Retention Analysis 1996-2001

ARC Maryland 4A

2001 firms analyzed: 9,266

Retention:

7,629 4,327

4,300 56% 1.12

464,648 1,011,886 117.8% 2.32

12 16 33% 0.80

85,819 69,499 81% 1.05

66,378 112,432 69% 1.08

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.78

Retained Firms

US = 1.00

ARC District 4A is administered by the Tri-County Council for Western Maryland, and includes Allegany, Garrett and Washington Counties. 

Allegany County also comprises the whole of the Cumberland MSA, while Washington County is within the Washington DC-Baltimore MSA.

The very modest vitality performance of the Cumberland MSA, which accounts for about one-third of the business establishments in the 

district, makes it clear that the bulk of the district’s apparent economic vitality emanates from other counties, and is in part influenced by 

spillover benefits from the Washington DC-Baltimore MSA. While retention indices are high in both the district and the Cumberland MSA – 

and startup activity rates low – the concentration of high growth firms in the district is almost twice that of the Cumberland MSA. Vitality 

indices and sales per employee positioning are also significantly lower in the Cumberland MSA (Allegany County).

Overall, the district indicates a strong vitality showing. High retention rates are matched by very strong sales and job replenishment vitality. 

Average retained job change rates are lower. As very positive context, retained firm sales per employee levels are 8 percent above national 

norms; by contrast, in Allegany County they are 35 percent below, with correspondingly lagging sales and job change vitality indices.

Positive vitality ratings and sales per employee positioning are indicated in textiles, wood products, stone-clay-glass and motor transport. 

Weaker sales per employee positioning coupled with strong vitality indicators relative to their industries are evident in coal mining, building 

construction, food products, furniture, paper products, chemicals, industrial machinery, electronics and transport equipment. Communications 

reflects high retention and job replenishment scores.

Business out-migration stands at 0.4 percent among firms from the 1996 pool that was tracked, and 0.6 percent of survivors, a relatively low 

rate of loss. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the 

number of area firms that ceased operations in the interim.

1.08 0.96

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Maryland 4A

2001 firms analyzed: 9,266

Startups:

975

15.2%

0.78

170 92

89 52% 1.12

468,142 741,772 58.5% 0.48

6 12 100% 1.50

1,072 1,002 93% 1.12

66,877 105,967 59% 0.77

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,531 109 2.41% 1.05

5,837 45 1.07

6,653 21 0.32%

7,133 1 0.0100% 0.25

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,961 15 0.2200% 1.13

0.77%

0.80

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Low startup rates across the district are almost a virtual match with the Cumberland MSA, showing little influence from the Washington DC 

MSA’s above average activity rates. This would suggest that the district’s higher retention vitality ratings result more from the relocation of 

core MSA firms into Washington County and the district than from an infusion which has taken root and generated its own offshoots. 

Startup activity is relatively solid in metalworking (primary and fabricated metals), but there are few other significantly scaled industries that 

show good startup rates. Larger groups of startups, in construction, motor freight, wholesale goods, business and personal services, all reflect 

activity rates significantly below US levels, though above the district’s average rate. 

While job vitality rates are good among retained startups – the sample is less than 100 – sales vitality and current sales per employee rates of 

retained startups from 1996 are quite low. In fact, very few industries indicate good retained startup sales per employee rates. However, a few 

appear to be making advances (from the limited data) in other vitality ratings, including paper products, business services and several retail 

industries.

Unlike the Cumberland MSA, the district nears US average levels for concentrations of high growth firms, leading the Appalachian region by 

six index points as well. The district indicates leading concentrations in two small job classes (Class I and II) as well as Class IV. In the 

absence of strong entrepreneurial vitality in the district, these firms offer the best near term opportunity to focus on real economic 

generators and expand their influence throughout the weaker sections of the district, e.g., Allegany County.

Aggregate : All Classes 7,133 139 1.95% 0.96
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5A

2001 firms analyzed: 4,632

Retention:

3,712 1,867

1,849 50% 0.99

1,382,469 566,575 -59.0% 0.00

11 14 27% 0.65

40,961 25,876 63% 0.82

92,165 80,939 -12% 0.78

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.99 0.88

Retained Firms

US = 1.00

ARC District 5A is administered by the Northeast Mississippi Planning and Development District, including Alcorn, Benton, Marshall, 

Prentiss, Tippah and Tishomingo Counties. 

The district has a weak set of economic vitality indicators, including retention indices which are slightly below average (both overall and 

startup), startup activity rates 12 percent below average and a very low concentration of high growth firms. Vitality indices among retained 

firms, both longer term and startups – are correspondingly low, as are the retained firm sales per employee indicators for both groups.

Modest retention rates are not enough to compensate for low vitality measures among retained firms in this small district. Vitality indices are 

all significantly below US and Appalachian levels. Concerns are re-emphasized by low sales per employee ratings among retained firms. 

Business out-migration – 0.5 percent of the firms tracked from the 1996 pool and 1.0 percent of survivors – is high, but more indicative of 

problems than the root of them. While the number of migrant firms is the same in both calculations, the pool of firms to which they are 

compared differs by the number of area firms that ceased operations in the interim.

Only the small miscellaneous manufacturing industry indicates high vitality indices across the board, including good sales per employee 

positioning. Agricultural services, heavy construction, wood products and personal services are the only industries to evidence good sales per 

employee positioning among retained firms. And only a few industries –plastics, primary metals industrial machinery and transport equipment 

– show leading vitality indices in more than one category. The absence of high sales per employee industries among these could constitute 

additional cause for concern.

0.78 0.68

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5A

2001 firms analyzed: 4,632

Startups:

545

17.2%

0.88

129 60

60 47% 0.99

994,737 753,448 -24.3% 0.00

5 8 60% 0.90

569 458 80% 0.97

165,789 94,181 -43% 0.68

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,444 40 1.64% 0.71

2,977 19 0.88

3,290 6 0.18%

3,502 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,429 3 0.0900% 0.46

0.64%

0.46

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is 12 percent below average, a single index point above the Appalachian average. Startups are retained at about average 

rates, and show job vitality scores just under average. However, aggregate sales vitality and sales per employee ratings among retained 

startups from 1996 are very low. 

Although representing a small number of firms, startup activity rates are higher than average in a number of manufacturing industries, 

including food products, apparel, wood products, furniture and plastics among non-durable manufacturers, in transport equipment and 

business services. Although sales per employee positioning appears weak, many of these same industries reflect high vitality ratings among 

retained startups from 1996, including wood products, furniture, transport equipment and business services. Vitality measures among retained 

startups in industrial machinery are also high. Conclusions are constrained, however, by the small number of firms in the sample.

The district shows weak concentrations of high growth firms across all employment classes examined, ranging no higher than 88 percent of 

the national average in Class II, firms which began with fewer than 10 employees and grew to more than 25. In the absence of high 

concentrations of high growth firms, or of high levels of startup activity, the small number of dynamic retained startups in value added 

industries could provide a key to the district’s economic future.

Aggregate : All Classes 3,502 48 1.37% 0.68
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5B

2001 firms analyzed: 9,328

Retention:

7,769 4,014

3,984 51% 1.02

499,133 821,620 64.6% 1.27

13 18 38% 0.92

98,400 69,519 71% 0.92

71,305 91,291 28% 0.88

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 0.74

Retained Firms

US = 1.00

ARC District 5B is administered by the Three Rivers Planning and Development District, and includes Calhoun, Chickasaw, Itawamba, Lee, 

Monroe, Pontotoc and Union Counties. 

Summary vitality rates in the district are lackluster, although not among the Appalachian region’s lowest. As in many relatively sluggish 

economic areas, the retention index is above average, although in this case startup retention falls 8 percent below US patterns. Startup 

activity rates are less than three-quarters of the national level, and 13 index points below the Appalachian average. High growth firm 

concentrations are significantly below both as well. While retained firm job vitality rates trails US patterns, it is relatively solid. Positive 

measures are “catching up” as evidenced by the still lagging sales per employee indicator (just below the Appalachian average). All vitality 

rates among retained startups appear very low.

The district boasts high aggregate rates both in the retention index and sales vitality among retained firms. However, despite the high sales 

change index, lower than average job vitality and lower than average annual sales, the aggregate sales per employee measure remains low 

among retained firms. Business out-migration rates are 0.4 percent from the pool of 1996 firms tracked, and 0.7 percent of survivors; this 

issue not the district’s major problem. While the number of migrant firms is the same in both calculations, the pool of firms to which they are 

compared differs by the number of area firms that ceased operations in the interim.

Alone among the district’s industries, the large rubber-plastics segment stands out for leading vitality indices all categories, including an 

above average sales per employee index among retained firms. The group appears strong enough to focus targeted development work. The 

often-linked industrial machinery group does not appear nearly as strong. Other industries with strong vitality indicators (but less commanding 

sales per employee position) include textiles, furniture, printing, chemicals and primary metals. Business services also scored high on multiple 

indices.

0.88 0.83

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5B

2001 firms analyzed: 9,328

Startups:

889

14.5%

0.74

224 96

96 43% 0.92

854,605 958,025 12.1% 0.10

9 12 33% 0.50

2,048 1,106 54% 0.65

122,086 106,447 -13% 0.77

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,924 97 1.97% 0.86

6,055 35 0.80

6,763 15 0.22%

7,200 5 0.0700% 1.24

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,035 12 0.1700% 0.90

0.58%

0.56

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are quite low, as are aggregate vitality indicators among retained startup firms. Both sales vitality and sales per 

employee are well below national levels, suggesting patterns that are losing ground – as they are in the Appalachian region, although not as 

dramatically. The number of retained startup firms from 1996 is under one hundred, constraining industry-specific analysis.

Among industries with significant numbers of firms, startup rates are high only in furniture and chemicals. Plastics startup activity is very low, 

and printing about average. Among retained startups, only construction trades contractors show high across the board indices. Sales per 

employee measures are also high among retained startups in wholesale durables, personal and business services, where the sales vitality 

index was high as well. Other industries indicating multiple high vitality ratings included agricultural services, wood products, furniture and 

motor freight.

High growth firm concentrations lag US and Appalachian patterns across the board, with an aggregate score 17 percent below US patterns 

and seven index points behind the Appalachian average. Given these low concentrations of real economic engines and even lower 

entrepreneurial vitality rates, it would appear that spin off benefits from the district’s most vital industry groups, including rubber-plastics and 

furniture, might present some of the district’s best opportunities.

Aggregate : All Classes 7,200 121 1.68% 0.83
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5C

2001 firms analyzed: 6,362

Retention:

4,850 2,774

2,758 57% 1.13

428,738 533,398 24.4% 0.48

13 16 23% 0.55

60,558 44,911 74% 0.96

71,456 76,200 7% 0.73

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.13 0.86

Retained Firms

US = 1.00

ARC District 5C is administered by the Golden Triangle Planning and Development District, including Choctaw, Clay, Lowndes, Noxubee, 

Oktibbeha, Webster and Winston Counties.

This district follows a common pattern for relatively low-growth areas, including high retention rates (in this case among both the general 

business population and startup firms) coupled with low startup activity levels (24 percent below the US average) and weak concentrations of 

high growth firms. Retained firm sales and job vitality measures are weak, as is the sales per employee rate. Job related measures among 

retained startups are higher than average. Food and wood products seem to be the most consistently performing significant industries.

High overall retention rates are undercut by weak vitality measures in sales and job change categories, despite a relatively solid job 

replenishment performance. Adding to the low vitality image, aggregate sales per employee ratings among retained firms are more than onequarter below US levels, and considerably lower than Appalachian levels as well. Aggregate average sales are significantly below US and 

Appalachian averages. Business out-migration was 0.3 percent of the 1996 business establishment population, and only 0.6 percent of 

survivors. This is relatively good news, but not all that unusual in rural, low vitality situations. While the number of migrant firms is the same in 

both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Plastics (only a handful of establishments) and railroad-related industries boasted the only high vitality ratings across the board, including high 

current sales per employee rates among retained firms. Other value-added industries with more than one high vitality measure but weaker 

sales per employee positioning included building construction and trades contractors, food products, wood products, chemicals, leather, 

fabricated metals and instruments.

0.73 0.81

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5C

2001 firms analyzed: 6,362

Startups:

694

16.7%

0.86

143 79

79 55% 1.18

527,083 798,551 51.5% 0.42

7 12 71% 1.07

923 907 98% 1.18

58,565 88,728 52% 0.64

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,013 62 2.06% 0.90

3,799 23 0.84

4,269 10 0.23%

4,552 2 0.0400% 0.79

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,453 2 0.0400% 0.24

0.61%

0.59

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are only one index point below the Appalachian average, but 14 percent under national levels. Startup retention is very 

high. Retained startups from the 1996 pool indicate relatively high levels of job vitality, but sales vitality weakness is a concern, especially 

when viewed in the context of low sales per employee rates among retained startups.

Activity rates are high in selected industries, including food products, apparel and business services, which are often technology-driven. Both 

primary metals and furniture also indicate high rates of entrepreneurial vitality, but the raw numbers here are so low that the measures may 

not mean much. Among retained startups, leading performances were developed in building and special trades construction industries, food 

products and wood products. Retention rates were very high in business services, suggesting the possibility of pent-up demand.

Concentrations of high growth firms are low in all employment classes, ranging from indexed scores of 0.24 in Class IV up to 90 percent of 

the US average in Class I, the smallest employment class. This is consistent with the high vitality ratings of retained startup firms in the 

business population overall.

Aggregate : All Classes 4,552 75 1.65% 0.81
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5D

2001 firms analyzed: 231

Retention:

184 102

102 55% 1.10

315,646 297,403 -5.8% 0.00

11 11 0% 0.00

1,868 1,096 59% 0.76

39,456 59,481 51% 0.57

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.76

Retained Firms

US = 1.00

ARC District 5D is administered by the East MS Planning and Development District, and covers Kemper County.

The small economic scale of this district makes meaningful analysis difficult. The general patterns of a low vitality area can be seen 

(including a higher than average overall retention rate), with correspondingly low rates in startup activity, startup retention and especially the 

high growth firm index. With the exception of overall retention rates (which are two index points higher), all summary measures are 

significantly below Appalachian averages.

Supporting comments elsewhere about the general lack of business relocations from even low vitality rural areas, it’s worth noting that not a 

single firm from the 1996 pool of 186 firms was identified as an out-migrant from the district by the start of 2001. Other firms stayed and 

survived in relatively large numbers, but vitality rates among them were dismal. All vitality measures were extremely low, and aggregate 

average sales figures – already significantly below national and Appalachian averages – dropped during the time series. The positioning 

indicator of sales per employee among retained firms was just over one-half the national average, and 37 index points below Appalachian 

levels.

The wood products and rubber-plastics industries appear to indicate good performance, but the number of firms in each is too limited for very 

meaningful analysis. No other value-added industries indicate high vitality measures.

0.57 0.28

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5D

2001 firms analyzed: 231

Startups:

24

14.7%

0.76

4 1

1 25% 0.53

100,000 100,000 0.0% 0.00

4 4 0% 0.00

14 4 29% 0.34

25,000 25,000 0% 0.18

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

127 0 0.00% 0.00

150 0 0.00

157 0 0.00%

173 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

170 1 0.5900% 3.10

0.00%

0.00

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The raw number of firms identified as engaged in startup activity over the five-year analysis period is so low as to make meaningful analysis a 

stretch. Suffice it to say that activity rates are very low, retained startups extremely rare, and those few industries which create high paper 

startup activity rates fail to do so in numbers from which any real conclusions can be drawn.

Only one firm in the district was identified as fitting defined high growth patterns, and this one was in Class IV, beginning with fewer than 50 

jobs and ending the analysis period reporting more than 100.

Aggregate : All Classes 173 1 0.58% 0.28
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5E

2001 firms analyzed: 417

Retention:

318 169

167 53% 1.04

340,079 451,145 32.7% 0.64

10 13 30% 0.72

3,210 2,132 66% 0.86

56,680 75,191 33% 0.72

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.04 0.70

Retained Firms

US = 1.00

ARC District 5E is administered by the North Central Planning and Development District, and covers Yalobusha County.

The small economic scale of this district makes meaningful analysis difficult. The general patterns of a low vitality area can be seen 

(including an above average retention rate), with correspondingly low rates in startup activity, startup retention and especially the high growth 

firm index. Sales per employee rates lag among retained firms. All measures, including the district’s high retention rate, are below 

Appalachian averages.

Two firms were identified as out-migrants over the analysis period, creating high out-migration rates (0.6 percent of the 1996 pool, 1.2 percent 

of survivors) which are not statistically meaningful. While the number of migrant firms is the same in both calculations, the pool of firms to 

which they are compared differs by the number of area firms that ceased operations in the interim. Other firms stayed and survived in 

relatively large numbers, but vitality rates among them were weak. All vitality measures were extremely low, and aggregate average sales 

figures – already significantly below national and Appalachian averages – fell further behind. The positioning indicator of sales per employee 

among retained firms was less than three-quarters of the US level, and eighteen index points below Appalachian levels.

The number of firms in individual value-added industries is too low to develop much industry-specific analysis. Even so, rates appear low, 

especially in the sale per employee positioning category. Limited industries – building construction, wood products and stone-clay-glass – 

indicate scattered higher vitality measures.

0.72 0.32

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Mississippi 5E

2001 firms analyzed: 417

Startups:

37

13.6%

0.70

6 1

1 17% 0.36

1,600,000 3,000,000 87.5% 0.72

45 15 -67% 0.00

269 15 6% 0.07

35,556 200,000 463% 1.45

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

226 1 0.44% 0.19

278 1 0.50

294 1 0.34%

304 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

301 0 0.0000% 0.00

0.36%

0.86

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The raw number of firms identified as engaged in startup activity over the five-year analysis period is so low as to make meaningful analysis a 

stretch. Suffice it to say that activity rates are very low, retained startups extremely rare, and those few industries which create high paper 

startup activity rates usually do so based on a single startup or two – which by and large did not survive the analysis period. Meaningful 

analysis of retained startup firms is constrained by the small number of firms identified in specific industries.

Only two firms in the district were identified as fitting defined high growth patterns, and these fit into definitions for three classes: Class I, II 

and III, since one of the firms leapfrogged into a second class by virtue of reported growth patterns.

Aggregate : All Classes 304 2 0.66% 0.32
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6A

2001 firms analyzed: 10,965

Retention:

10,057 5,664

5,632 56% 1.11

422,438 579,542 37.2% 0.73

11 15 36% 0.87

100,509 81,382 81% 1.05

70,406 82,792 18% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.11 0.60

Retained Firms

US = 1.00

ARC District 6A is administered by the Southern Tier West Regional Planning and Development Board, and includes Allegany, Cattaraugus 

and Chautauqua Counties. Chautauqua County is contiguous with the Jamestown NY MSA. 

The District’s summary vitality measures fit patterns for many northern districts with relatively low vitality, including high retention rates 

coupled with low startup activity and below average concentrations of high growth firms. The summary retained firm sales per employee 

index lags US levels by 20 percent. Summary measures in the district all fall below those of the Jamestown MSA, indicating more serious 

problems in Allegany and Chautauqua Counties. Startup activity and growth firm concentrations are also below Appalachian averages.

While aggregate retention rates in the district are high, vitality measures are significantly below average in all but the job replenishment 

category. Sales per employee positioning of retained firms is about 20 percent below average. While job vitality is stronger in the MSA, sales 

and sales per employee measures are not. Business out-migration is not a major concern: Out-migration rates were 0.3 percent of the 1996 

pool of firms tracked, and 0.6 percent of survivors, a little below average. While the number of migrant firms is the same in both calculations, 

the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Various vitality measures are high in several core industries, including wood products, furniture, paper, chemicals, plastics, fabricated metals, 

the plastics-linked industrial machinery segment and instruments. While both job and sales change measures are above average in various of 

these industries, sales per employee levels appear uniformly low. Although retention is average to above-average, all vitality measures in both 

communications and business services are low.

0.80 0.86

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6A

2001 firms analyzed: 10,965

Startups:

907

11.7%

0.60

214 117

115 54% 1.15

630,233 693,939 10.1% 0.08

6 8 33% 0.50

1,270 899 71% 0.85

78,779 99,134 26% 0.72

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

6,486 128 1.97% 0.86

7,951 45 0.78

8,833 33 0.37%

9,289 3 0.0300% 0.58

'96 Firms in Class High Growth 96-01 % High Growth US Index

9,127 20 0.2200% 1.15

0.57%

0.94

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are distressingly low in the district, and only marginally higher in the Jamestown MSA. All aggregate vitality ratings 

among retained startups are also very low, causing the already weak sales per employee rate among retained starts to fall further behind.

Wood products and printing are the only value added industries indicating higher than average startup rates. Startup activity is surprisingly low 

in some of the district’s core metalworking industries, especially fabricated metals, though only 6 percent below average in industrial 

machinery. Startup rates are extremely low in value-added communications and business services.

Although activity rates are low, retained startups in fabricated metals, motor freight transport and whole non-durables indicate high vitality 

scores. Business services startups reflect retention rates 40 percent above average, pointing to market gaps in the industry common to many 

northern ARC districts

Concentrations of high growth firms in the district are 14 percent lower than the US average and four index points under the Appalachian 

region. Notably, both the Jamestown MSA and the Erie MSA directly to the south both host high growth firm concentrations somewhat 

closer to national levels. These concentrations could provide spillover opportunities for the district which would compensate, at least in part, 

for the lag in entrepreneurial vitality.

Aggregate : All Classes 9,289 162 1.74% 0.86
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6B

2001 firms analyzed: 7,528

Retention:

7,087 3,855

3,837 54% 1.07

435,254 651,525 49.7% 0.98

13 24 85% 2.03

87,335 92,343 106% 1.37

72,542 72,392 0% 0.70

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.07 0.72

Retained Firms

US = 1.00

ARC District 6B is administered by the Southern Tier Central Regional Planning and Development Board, including Chemung, Schuyler and 

Steuben Counties. Chemung County is contiguous with the Elmira NY MSA.

The most apparent difference between summary vitality measures in the district and the Elmira MSA is the concentration of high growth 

firms, which is fifteen index points higher in the MSA. The MSA also indicates a much high startup retention index, one which is above 

average, while district rates are about 7 percent below national patterns. Other ratings – a high overall retention index, and startup activity 

rates which lag national trends by more than 25 percent -- are similar. The District’s retained firm sales per employee indicator lags US 

patterns by 30 percent.

While current sales per employee positioning is low in both the district and MSA, vitality measures in the district appear considerably higher 

among retained firms. Aggregate sales vitality measures are close to national levels, while both employment vitality rates lead US, 

Appalachian and Elmira MSA levels. At 0.3 percent of the 1996 pool of firms tracked and 0.5 percent of survivors, business out-migration 

rates are low. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the 

number of area firms that ceased operations in the interim.

Construction, wood products and furniture industries reflect high ratings across multiple measures, including high sales per employee 

position. But several other value-added industries also indicate multiple leading vitality measures, but lower sales per employee. These 

include agricultural services, stone-clay-glass, primary and fabricated metals. Business services retention is very strong, possibly indicating 

pent-up demand in an industry which often lags in northern ARC areas. Measures in communications are very strong in all categories except 

sales per employee among retained firms.

0.70 0.79

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6B

2001 firms analyzed: 7,528

Startups:

721

14.0%

0.72

151 68

66 44% 0.93

519,565 305,085 -41.3% 0.00

6 9 50% 0.75

804 560 70% 0.84

103,913 61,017 -41% 0.44

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,407 83 1.88% 0.82

5,543 32 0.80

6,196 19 0.31%

6,605 5 0.0800% 1.35

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,451 11 0.1700% 0.90

0.58%

0.77

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup activity ratings are very low, specific core industries indicate leading measures, including wood products, stone-clay-glass, and 

metalworking industries, including primary metals, fabricated metal, electronics and instruments. Several of these also performed well in 

multiple vitality rankings among retained firms. Retained startups in construction, electronics and instruments also scored well in multiple 

vitality categories. However, aggregate vitality and sales per employee ratings among retained startups were quite low, corresponding to weak 

performance in the MSA.

Concentrations of high growth firms in the district are well below levels in the US, Appalachia and the Elmira MSA. The district has lower 

than average concentrations in every employment class, reinforcing the vitality lag created by the gap in entrepreneurial vitality. As a result, 

the district depends on solid, even leading performance from a handful of industries, most of which still lag in sales per employee indicators 

among retained firms nationally.

Aggregate : All Classes 6,605 106 1.60% 0.79
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6C

2001 firms analyzed: 22,445

Retention:

21,709 11,693

11,610 54% 1.06

409,722 574,381 40.2% 0.79

12 15 25% 0.60

249,759 177,328 71% 0.92

68,287 82,054 20% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.59

Retained Firms

US = 1.00

ARC District 6C is administered by the Southern Tier East Regional Planning and Development Board, and includes Broome, Chenango, 

Cortland, Delaware, Otsego, Schoharie, Tioga and Tompkins Counties. Broome and Tioga Counties are in the Binghamton MSA, while 

Schoharie is covered by the Albany MSA.

Summary scores in the district suggest common patterns for relatively slow-growth areas, including high overall and startup retention rates, 

but coupled with very low entrepreneurial activity levels and low concentrations of growth firms. The retained firm sales per employee index 

lags both US and the Appalachian rate (0.90) significantly. Aggregate vitality scores in both MSAs linked to the district are considerably 

higher than the district’s scores themselves. Traditional industries in both MSAs, including metalworking, exhibit at least some strong vitality 

ratings which could be mined for opportunities in the district.

Despite high retention rates, every aggregate sales and job measure in the district falls below corresponding rates in each MSA, the US and 

the Appalachian region. The contrast with the Albany MSA is particularly sharp. Aggregate sales per employee positioning in the district is 21 

percent below US levels, not far behind rates in the Binghamton MSA but trailing Albany by a considerable margin. However, district business 

out-migration levels are 0.4 percent of the 1996 pool of firms tracked and 0.7 percent of survivors, not much above standard levels. Outmigration from the Binghamton MSA (but not Albany) is much higher. While the number of migrant firms is the same in both calculations, the 

pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Despite lower overall vitality figures, the district evidences vitality in a number of the same industries as the linked MSAs, including wood 

products and furniture, as well as each of the metalworking industries – primary metals, fabricated metals, industrial machinery, electronics 

and transport equipment and instruments, although all except transport equipment indicate low sales per employee positioning. Retention 

rates are good in technology driven industries such as communications and business services, and each reflects some leading vitality 

measures as well. Vitality rates are weak in most wholesale, retail and service industries, accounting for much of the lag in aggregate scores.

0.79 0.83

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC New York 6C

2001 firms analyzed: 22,445

Startups:

1,822

11.5%

0.59

472 256

249 53% 1.13

772,924 1,240,789 60.5% 0.50

6 11 83% 1.25

2,883 2,632 91% 1.10

96,616 124,079 28% 0.90

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

14,091 280 1.99% 0.86

17,173 87 0.70

19,174 42 0.22%

20,314 5 0.0200% 0.44

'96 Firms in Class High Growth 96-01 % High Growth US Index

19,916 32 0.1600% 0.85

0.51%

0.55

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup activity is extremely limited – too limited to overlook as a major weakness – job measures among retained startup firms are 

good. Sales vitality is weak, but current sales per employee positioning is only 10 percent below par, above Appalachian and Albany MSA 

levels. Both job vitality indices among retained startups are strong. 

Startup activity indicates leading levels in only a few value added industries with more than a handful of firms, among them plastics, stoneclay-glass, primary and fabricated metals. Retained startup job and sales measures are quite strong among metalworking startups as well, as 

it is among startups in industrial machinery. Both fabricated metals and industrial machinery startups also indicate good sales per employee 

positioning. Startups in motor freight transport and the technology-driven business services industry also demonstrate multiple high vitality 

ratings. Sales vitality in business services was weak, although ultimate sale per employee levels among retained firms were only 10 percent 

below national levels.

Concentrations of high growth firms in the district are 83 percent of the national norm. No single employment class showed higher than 

average concentrations, which ranged down to 55 percent of the US average in Class III and 44 percent in the largest class analyzed, Class 

V. High growth firms concentrations in the linked MSAs ranged five to eight index points higher, and were seven points higher in the 

Appalachian regional index.

Aggregate : All Classes 20,314 344 1.69% 0.83
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7A

2001 firms analyzed: 7,728

Retention:

5,484 3,007

2,986 54% 1.08

312,547 487,778 56.1% 1.11

10 12 20% 0.48

51,578 36,671 71% 0.92

62,509 69,683 12% 0.67

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.82

Retained Firms

US = 1.00

ARC District 7A is administered by the Southwestern NC Planning and Development Commission, including Cherokee, Clay, Graham, 

Haywood, Jackson, Macon and Swain Counties.

This district evidences summary measures which are often indicative of relatively sluggish economic vitality. High retention rates among the 

general business population and startup firms alike are coupled with low levels of startup activity and low concentrations of high growth firms. 

Job vitality measures among retained firms also tend to be low, and the retained firm sales per employee indicator is just two-thirds of the 

national average.

The district’s high retention rate is matched by an level of sales vitality which is about 11 percent above average. However, the sales vitality 

index measures the relative change in sales from the original pool to retained firms; the sales per employee index for retained firms, which 

compares current rates among survivors, is quite low, suggesting that recent sales vitality, while laudable, has still not raised local positioning 

to national levels. Job vitality indices are also lower than both US and Appalachian levels. Business out-migration rates are 0.4 percent 

among firms from the 1996 pool, and 0.7 percent among surviving firms, a very modestly higher loss rate than might be desired, but not a 

major concern. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the 

number of area firms that ceased operations in the interim.

Only two industries indicate high vitality measures in all categories and couple them with high sales per employee positioning: chemicals and 

the paper industry. Other industries indicating multiple leading vitality measures include heavy construction, apparel, furniture, printing leather 

and, alone among heavy manufacturers, industrial machinery. Value-added, often technology-driven services, including communications and 

business services, performed poorly.

0.67 0.80

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7A

2001 firms analyzed: 7,728

Startups:

868

15.9%

0.82

219 120

118 54% 1.15

351,282 1,001,724 185.2% 1.52

5 6 20% 0.30

988 744 75% 0.90

70,256 166,954 138% 1.21

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,603 68 1.89% 0.82

4,510 19 0.58

4,952 11 0.22%

5,191 1 0.0200% 0.34

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,111 4 0.0800% 0.41

0.42%

0.56

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are 18 percent below the national average and five index points below the rest of Appalachia. Only a handful of 

industries indicate startup activity levels above the national average, including building construction, food products, stone-clay-glass, 

fabricated metals and electronics. Startup levels among value added services are low.

Retained startups do somewhat better. In addition to high survival rates, retained startups from the 1996 pool indicate not only high levels of 

sales vitality (as did retained firms overall), but a correspondingly high sales per employee index.

Retained startups in agricultural services, paper products, electronics, transport and legal services all indicate multiple high vitality ratings 

coupled with a high sales per employee index. Startup activity and retained startup vitality rates in valued-added business services and 

communications were weak.

Concentrations of high growth firms were 20 percent lower than national patterns, and ten index points below the Appalachian average. 

Indices ranged as low as 34 percent of national ratings in Class V, and never higher than 82 percent of average levels in the smallest 

employment Class I. The influence of these limited numbers of small high growth firms is unlikely to compensate for the district’s weak 

retained firm vitality and the lag in entrepreneurial activity.

Aggregate : All Classes 5,191 84 1.62% 0.80
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7B

2001 firms analyzed: 15,105

Retention:

12,104 6,517

6,481 54% 1.06

488,675 652,297 33.5% 0.66

12 17 42% 1.00

132,955 108,115 81% 1.06

81,446 81,537 0% 0.78

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.81

Retained Firms

US = 1.00

ARC District 7B is administered by the Land-of-Sky Regional Council, including Buncombe, Henderson, Madison and Transylvania Counties. 

Buncombe and Madison Counties comprise the whole of the Asheville MSA.

The MSA comprises about two-thirds of the district’s economy. While the correspondence between vitality measures in the MSA and district 

is high, differences do exist – and the most significant of these largely favor the MSA. The summary retention index in both is high, and 

startup survival rates in the district, which are at national average levels, surpass the MSA by nine index points, only slightly lower than the 

Appalachian average. District sales per employee lags both national and Regional patterns. Startup activity rates are 19 percent lower than 

national averages. Startup activity in the district trails Appalachian levels by six index points and the MSA by ten. More encouragingly, 

concentrations of high growth firms are only 9 percent below national levels.

Retained firm vitality rates in the district are generally solid, buoyed by a high retention index and good job vitality scores. However, low sales 

vitality and a weak sales per employee index suggest other concerns. Moreover, The fact that job vitality ratings are higher in the MSA 

indicates weaker patterns within the two non-MSA counties in the district. Business out-migration patterns – 0.3 percent of firms from the 

1996 pool tracked and 0.5 percent of survivors – are not a major concern. While the number of migrant firms is the same in both calculations, 

the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Only a small number of industries in the district show higher than average sales per employee positioning – among them food products 

manufacturing and health services. The agricultural services industry, which also indicates some good vitality measures, comes close. Other 

industries with strong performances in at least two vitality measures include apparel, paper, printing, chemicals, fabricated metals, electronics 

and transport equipment. Air transport and transport services firms also performed well, although sales per employee positioning was weak in 

services. Vitality measures in the technology-driven communications and business services industries were low. The weak performance of 

business services, FIRE industries, engineering and several metalworking industries lagged behind MSA patterns.

0.78 0.96

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7B

2001 firms analyzed: 15,105

Startups:

1,675

15.9%

0.81

445 210

208 47% 1.00

300,735 414,286 37.8% 0.31

9 13 44% 0.67

3,950 2,581 65% 0.79

50,123 59,184 18% 0.43

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

7,661 178 2.32% 1.01

9,549 59 0.85

10,658 29 0.27%

11,338 3 0.0300% 0.47

'96 Firms in Class High Growth 96-01 % High Growth US Index

11,070 13 0.1200% 0.62

0.62%

0.69

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are 19 percent below national averages, and several points behind both the MSA and Appalachian levels. Aside from a 

handful of industries with few firms, startup activity rates are mainly positive only in the FIRE sector, reflecting MSA concentrations. While 

startup retention is average (and higher than the MSA index), all aggregate measures are uniformly low, with a dismal sales vitality rate 

dragging down an already low sales per employee index. Vitality rates (but not sales per employee) among retained startups are high in wood 

products, printing and industrial machinery.

Concentrations of high growth firms are 96 percent of the US average, six points above the Appalachian index and twelve points more than 

the MSA. While the district’s scores are quite low in larger employment classes, they consistently top those of the MSA, indicating higher 

concentrations in non-MSA firms. The assessment of high growth firms for spillover benefits to the harder hit counties in the district could be 

a glimmer of opportunity for the district’s two non-MSA counties, which showed weak retention and startup vitality in comparison with the 

MSA.

Aggregate : All Classes 11,338 221 1.95% 0.96
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7C

2001 firms analyzed: 4,433

Retention:

3,076 1,763

1,742 57% 1.12

416,660 641,988 54.1% 1.07

15 20 33% 0.80

43,875 34,831 79% 1.03

69,443 91,713 32% 0.88

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.71

Retained Firms

US = 1.00

ARC District 7C is administered by the Isothermal Planning and Development Commission, including McDowell, Polk and Rutherford 

Counties.

This district’s relatively small economy indicates a pattern of relatively lackluster vitality common to many ARC districts. High overall 

retention rates are complemented by solid startup retention, but seriously undercut by a large gap in entrepreneurial vitality and a significant 

lag in concentrations of high growth firms. Startup activity, startup retention and high growth concentrations all trail Appalachian as well as 

US patterns. While some vitality indices are above average, they are within the context of lagging aggregate sales per employee indices.

In addition to high levels of retention, aggregate vitality scores are above average in two categories – sales and job replenishment. However, 

aggregate sales per employee rates are 12 percent below US averages and six index points below Appalachian levels, lending a “catch-up” 

rather than a “leading” context to the solid vitality scores. Business out-migration rates are 0.7 percent of the 1996 pool of firms tracked and 

1.2 percent of survivors, a relatively high rate that reflects overall area concerns. While the number of migrant firms is the same in both 

calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

Only two significant value-added industries – wood products and fabricated metals – indicated above average sales per employee indices. 

Vitality scores in wood products are quite strong in all measures. While sales per employee positioning is low, a number of other industries 

indicate strong job and sales vitality patterns, including food products, paper, printing, chemicals, plastics and industrial machinery. 

Technology-driven service industries reflected weak vitality indices.

0.88 0.79

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7C

2001 firms analyzed: 4,433

Startups:

425

13.9%

0.71

91 44

42 46% 0.99

1,332,787 1,015,000 -23.8% 0.00

16 10 -38% 0.00

1,426 429 30% 0.36

63,466 92,273 45% 0.67

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,979 34 1.72% 0.75

2,484 13 0.72

2,741 9 0.33%

2,920 1 0.0300% 0.61

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,852 5 0.1800% 0.92

0.52%

0.83

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates lag national patterns by more than one-third and Appalachian levels by sixteen index points. The aggregate vitality 

performance of retained startups is quite weak in all vitality measures, as well as current sales per employee positioning among retained 

startups. The small number of retained startups precludes much industry-specific analysis, although solid sales per employee measures in 

wood products and business services should be mentioned, along with other high retained startup vitality rates in the wood products industry, 

printing and professional services.

While entrepreneurial activity is generally weak, relative startup rates are notably higher in food products, textiles, paper, chemicals, 

fabricated metals and industrial machinery – almost all among the stronger industries in overall retention vitality indices.

Concentrations of high growth firms are 21 percent below national averages and eleven index points behind Appalachia. The district trails 

high growth concentrations in each employment class examined, with lower scores in smaller classes (most likely entrepreneurial) and 

somewhat better performance in Class IV.

Aggregate : All Classes 2,920 47 1.61% 0.79
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7D

2001 firms analyzed: 8,472

Retention:

5,921 3,320

3,298 56% 1.11

417,528 612,742 46.8% 0.92

13 17 38% 0.92

71,037 58,601 82% 1.07

69,588 76,593 10% 0.74

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.11 0.77

Retained Firms

US = 1.00

ARC District 7D is administered by the Region D Council of Governments, including Alleghany, Ashe, Avery, Mitchell, Watauga, Wilkes and 

Yancey Counties.

Vitality patterns in this district indicate a common Appalachian pattern of high retention rates (overall and startup) coupled with very weak 

entrepreneurial vitality levels and relatively low concentrations of high growth firms. However, job and sales vitality measures in the district 

are relatively strong, even if conditioned by lagging sales per employee positioning. In addition, concentrations of high growth firms, while 

trailing national averages by 5 percent, are stronger than average Appalachian trends. As a result, the outlook is somewhat better than in 

many other districts saddled with similar summary measures.

The district’s retention index is 11 percent above national averages, slightly above the Appalachian average. Vitality among the area’s 

retained firms is relatively solid; all rates are within 8 percent of national averages and the job replenishment index is above both US and 

Appalachian scores. The sales per employee measure among retained firms is only 74 percent of the US average and twenty index points 

below Appalachia, suggesting a lag in competitive positioning among retained firms. Business out-migration rates are 0.4 percent of the 

original pool of 1996 firms tracked, and 0.7 percent among survivors – not a cause for alarm in its own right. While the number of migrant 

firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations 

in the interim.

Among value-added industries and export services, only wood products indicates high across the board vitality ratings and couples them with 

a high sales per employee index. Food products and electronics miss the sales per employee mark by 10 percent or less, but all other vitality 

indicators are strong. Fabricated metals also indicated high sales per employee levels, but without strong vitality indicators. Other valueadded industries reflecting multiple high vitality scores include building and special trades construction, chemicals, printing, plastics and 

industrial machinery, which was high in all vitality segments but showed weak sales per employee positioning. Notably, both technologydriven export services, communications and business services demonstrated high retention and vitality ratings in all categories except sales 

per employee.

0.74 0.95

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7D

2001 firms analyzed: 8,472

Startups:

878

15.0%

0.77

219 120

119 54% 1.16

406,569 694,737 70.9% 0.58

5 8 60% 0.90

949 933 98% 1.18

81,314 86,842 7% 0.63

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,777 75 1.99% 0.86

4,759 33 0.96

5,281 18 0.34%

5,576 1 0.0200% 0.32

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,481 9 0.1600% 0.86

0.69%

0.86

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup retention rates are high, startup activity rates – and vitality among retained startups – showed low ratings. Startup activity was 

almost one-quarter below US averages. Aggregate sales vitality and sales per employee among retained startups were both significantly 

lower than that, and higher job replenishment ratings among startups don’t compensate for overall lackluster sales change and positioning 

among the group. 

Although small establishment numbers make industry-specific analysis difficult, food products, textiles, stone-clay-glass and instruments all 

showed higher than average entrepreneurial activity ratings, while startup activity in other manufacturing industries and value-added services 

was quite low. Among retained startups, those in building construction and the handful in wood products and textiles indicated solid sales per 

employee positioning (wood) or sales and job vitality ratings.

The district’s aggregate high growth concentration of 0.95 is led by the Class II index, firms which began the analysis period with fewer than 

ten jobs and grew to more than twenty-five by the beginning of 2001. Other classes lag US averages by 14 percent and more, and (except 

for the largest Class V) tend to be at the same general level as scores for the Appalachian region. The region’s Class V score is much 

higher.

Aggregate : All Classes 5,576 108 1.94% 0.95
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7E

2001 firms analyzed: 6,206

Retention:

5,291 2,935

2,912 55% 1.09

448,898 647,419 44.2% 0.87

14 19 36% 0.86

72,556 56,456 78% 1.01

64,128 80,927 26% 0.78

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.71

Retained Firms

US = 1.00

ARC District 7E is administered by the Western Piedmont Council of Governments, including Alexander, Burke and Caldwell Counties. All 

three of the LDD counties are included in the Hickory-Morganton MSA.

Summary indicators in this LDD suggest a common pattern of high retention rates coupled with relatively low vitality. Startup activity rates are 

especially low, and although high growth concentrations are slightly above the Regional average, they fall 10 percent below US norms. Sales 

per employee positioning is only slightly more than three-quarters of the US level. District vitality indices correspond closely to those of the 

Hickory MSA with the exception of startup activity, which the District trails by nine points.

The area’s overall retention rate is 9 percent above average, although sluggish job and sales change patterns among retained firms suggest 

that a modest competitive environment may be a factor. Business out-migration is about 0.4 percent of the 1996 pool of firms tracked, and 

double that for the survivor group – about average. While the number of migrant firms is the same in both calculations, the pool of firms to 

which they are compared differs by the number of area firms that ceased operations in the interim. While job replenishment is slightly above 

US levels, sales change, average employment change and sales per employee among surviving firms are all far below national trends.

At the same time, a number of value added industries demonstrate high vitality patterns. Food products, textiles, paper, stone-clay-glass, 

plastics, primary metals, fabricated metals and instruments all show good sales per employee rates and leading sales and/or job change 

indices among survivor firms. Although sales per employee measures are lower, furniture, industrial machinery and electronics also display 

leading indices in more than one vitality category. Motor freight and transport services perform well in vitality indices (despite lower retention 

rates), but communications and business services fare poorly.

0.78 0.90

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7E

2001 firms analyzed: 6,206

Startups:

582

13.8%

0.71

151 77

75 50% 1.06

1,282,353 1,334,848 4.1% 0.03

13 24 85% 1.27

2,016 1,801 89% 1.07

85,490 121,350 42% 0.88

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,360 59 1.76% 0.76

4,185 33 1.09

4,625 22 0.48%

4,955 6 0.1200% 2.16

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,832 13 0.2700% 1.42

0.79%

1.20

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates lag 29 percent below the national average and, although job growth among surviving starts is very positive, sales change 

in the same group – and startup survivor sales per employee rates – are very low. 

Activity rates are high, in specific industries however, including agricultural services, furniture, instruments, miscellaneous manufacturing and 

transport services. Other industries with rates at or approaching national levels include construction, motor freight and professional services.

Among surviving startups, those in furniture, plastics, chemicals, fabricated metals and a few retail industries indicate high sales per 

employee positioning. Furniture, plastics and chemicals startup survivors also indicate other high vitality patterns. While surviving startups in 

the technology-driven business services industry show lagging sales per employee rates, other vitality patterns are good.

The area’s aggregate high growth index is ten points below the national average. However, in all classes but the smallest (Class I), local 

high growth concentrations outstrip US norms, consistently and impressively. This suggests that the area lag in entrepreneurial vitality is at 

least partially compensated by the development of more mature growth engines which are making themselves felt, giving the area some 

time to intensify work on developing conditions for new growth and entrepreneurship.

Aggregate : All Classes 4,955 90 1.82% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7I

2001 firms analyzed: 19,085

Retention:

15,363 7,823

7,734 50% 1.00

548,781 832,283 51.7% 1.02

15 23 53% 1.28

218,880 175,750 80% 1.04

78,397 92,476 18% 0.89

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.00 0.76

Retained Firms

US = 1.00

ARC District 7I is administered by the Northwest Piedmont Council of Governments, including Davie, Forsyth, Stokes, Surry and Yadkin 

Counties. All counties in the LDD counties are included in the Greensboro MSA.

Summary scores in this area are somewhat ambiguous, and do not tell the story. Average retention rates are supported by high growth 

concentrations which are fairly impressive for an Appalachian area, and growth patterns among retained firms are quite good despite lagging 

sales per employee rates. Only startup activity trails national trends badly among summary indices. Higher MSA scores in both startup 

activity and high growth indices suggest an opportunity to derive spillover benefits from the rest of the MSA.

Despite sales per employee positioning which is 11 percent below average overall (and about five points below the Regional average) the 

vitality of survivor firms in the district is positive in every other category; sales change, job change and even with national patterns in the 

retention index itself. Notably, the LDD lags startup activity in the Greensboro MSA of which it is a part. Business out-migration is about 0.6 

percent of the original 1996 pool, and 1.1 percent of survivors – slightly high, but not an unusual level for an MSA. While the number of 

migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased 

operations in the interim.

Sales per employee indicators are particularly high in non-metallic mining, food products, furniture, chemicals, primary and fabricated metals, 

instruments, transport services, education and engineering-research. Mining, chemicals, primary and fabricated metals and educational 

services were also standouts across the board in other vitality measures. Plastics scored well in a other categories, but lagged in sales per 

employee positioning.

0.89 0.95

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC North Carolina 7I

2001 firms analyzed: 19,085

Startups:

1,891

14.8%

0.76

457 213

207 45% 0.97

742,581 1,328,497 78.9% 0.65

9 15 67% 1.00

3,809 3,054 80% 0.96

106,083 147,611 39% 1.07

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,693 218 2.25% 0.98

12,032 73 0.84

13,515 40 0.30%

14,435 8 0.0600% 0.99

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,081 20 0.1400% 0.75

0.61%

0.75

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are quite low, about three-quarters of the national average. Among significantly scaled industries, wood products, 

chemicals, plastics, primary metals and electronics display leading levels of startup activity, which also approached national levels in the 

communications industry but lagged seriously in technology-driven business services. 

While sales per employee positioning among surviving startups is excellent and job vitality is at national levels, sales vitality among startup 

survivors is low, suggesting that good current sales per employee positioning may erode. That position is currently leading in construction, 

food products, textiles, furniture and wholesale, and close to US levels in several other industries. Vitality leads national levels in several 

categories among surviving startups in general construction contracting, food products and all major metalworking industries: primary metals. 

fabricated metals and industrial machinery.

Startup activity rates are quite low, about three-quarters of the national average. Among significantly scaled industries, wood products, 

chemicals, plastics, primary metals and electronics display leading levels of startup activity, which also approached national levels in the 

communications industry but lagged seriously in technology-driven business services. 

While sales per employee positioning among surviving startups is excellent and job vitality is at national levels, sales vitality among startup 

survivors is low, suggesting that good current sales per employee positioning may erode. That position is currently leading in construction, 

food products, textiles, furniture and wholesale, and close to US levels in several other industries. Vitality leads national levels in several 

categories among surviving startups in general construction contracting, food products and all major metalworking industries: primary 

metals fabricated metals and industrial machinery

Aggregate : All Classes 14,435 278 1.93% 0.95
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8A

2001 firms analyzed: 20,790

Retention:

15,486 8,888

8,767 57% 1.12

416,681 605,193 45.2% 0.89

11 15 36% 0.87

156,387 127,603 82% 1.06

69,447 75,649 9% 0.73

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.70

Retained Firms

US = 1.00

ARC District 8A is administered by the Ohio Valley Regional Development Commission, including Adams, Brown, Clermont, Gallia, Highland, 

Jackson, Lawrence, Pike, Ross, Scioto and Vinton Counties. Two of the LDD counties are included in the Cincinnati MSA, and one in the 

Huntington-Ashland MSA.

Despite the proximity of the Cincinnati MSA (and the inclusion of two MSA counties in the District), the LDD lags the MSA significantly in 

almost all ratings. Most importantly, the District’s startup activity rate is 30 percent below US averages – and trails the MSA score by 29 

points. High growth concentrations, which compensate for low entrepreneurial patterns in some ARC Districts, also lag – the US by 15 

percent and the Cincinnati MSA by almost twice that much. The District’s high retention scores among both the general business population 

and startups are small consolation in the context.

Although overall retention rates are 12 percent above national levels, sales and job vitality indices among retained firms lag 11 percent-13 

percent below national trends and considerably further behind the Cincinnati MSA. Sales per employee positioning is more than one-quarter 

below US averages despite a corresponding rate in the MSA which trails the US by only 4 percent. Overall, the MSA’s high retention rate 

prevails despite good startup vitality and dynamism among surviving firms, a combination which eludes the District. 

Among arguably value-added industries, leading sale per employee rates are found only in non-metallic mining, transport equipment, 

miscellaneous manufacturing, transportation services, banks and engineering. Other high sales or job rates can be identified among survivor 

firms in food products, building construction, wood products, printing, industrial machinery, electronics, instruments and engineering-research. 

This range suggests that a number of industries in the District may be advancing to national level position. High vitality patterns in durable 

wholesale industries underscore this indication. 

Business out-migration is 0.8 percent from the original pool of 1996 firms tracked and 1.4 percent of survivors, somewhat high for a District 

not entirely concentrated in a metropolitan area – but not the area’s major cause for concern. While the number of migrant firms is the same 

in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations in the interim.

0.73 0.85

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8A

2001 firms analyzed: 20,790

Startups:

1,897

13.7%

0.70

424 230

222 52% 1.12

389,680 507,538 30.2% 0.25

10 17 70% 1.05

4,103 3,687 90% 1.08

64,947 84,590 30% 0.61

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,895 194 1.96% 0.85

12,231 77 0.87

13,593 51 0.38%

14,494 9 0.0600% 1.11

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,203 30 0.2100% 1.11

0.63%

0.95

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity lags national trends by 30 percent, but higher rates are discernible in food products, apparel, paper products, printing, 

chemicals, fabricated metals and instruments. Startup activity rates in plastics and communications also approach national levels, the former 

driven by strengths in the larger region. 

Job vitality among surviving startups is strong, as is the startup survival rate. But sales vitality lags badly, 75 percent behind the US average 

and more than 120 index points below the Cincinnati MSA. Sales per employee positioning is one-third less than the national average and half 

of that in the MSA. Stronger sales per employee positioning is found in a handful of manufacturing industries, including wood products, 

plastics, fabricated metals, industrial machinery, electronics and wholesale durables. The handful of surviving startups in plastics and 

instruments also reflect high vitality ratings in several other measures.

The proportion of high growth concentrations in the District is about 15 percent below national trends. However, they improve in larger 

employment categories and could provide some compensation for lower startup and vitality patterns elsewhere. However, high growth 

concentrations lag the Cincinnati MSA consistently, and suggest eventual branch development opportunities in the District if the proper 

groundwork is laid with high growth Cincinnati firms.

Aggregate : All Classes 14,494 251 1.73% 0.85
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8B

2001 firms analyzed: 9,225

Retention:

6,591 3,904

3,865 59% 1.16

360,281 520,662 44.5% 0.88

10 15 50% 1.20

63,269 56,806 90% 1.17

60,047 74,380 24% 0.72

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.16 0.64

Retained Firms

US = 1.00

ARC District 8B is administered by the Buckeye Hills-Hocking Valley Regional Development District, including Athens, Hocking, Meigs, 

Monroe, Morgan, Noble, Perry and Washington Counties. One of the District counties, Washington, is included in the Parkersburg MSA.

The District is characterized by the common ARC pattern of high retention rates coupled with lower levels of new business vitality and mixed 

growth among existing industries. Startup activity rates are more than one-third below national levels and twenty-three index points below the 

region. Startup retention is very high, but growth among survivor startups is quite weak. Concentrations of high growth firms are within 8 

percent of the national averages, mainly concentrated in the smallest employment classes. The area’s vitality patterns closely track those in 

the Parkersburg MSA (although the latter’s startup activity rate, while lagging, is considerably higher than the District’s).

The overall retention rate is a full 16 percent above the national level, eight points higher than the Regional average. Job vitality patterns are 

positive in both job categories, but sales vitality is weak, prompting an overall sales per employee index more than one-quarter below the US 

average and twenty-two index points below the Region. Among value-added industries, leading sales per employee rates are evident in only a 

handful, including heavy construction (infrastructure), electronics and instruments. Both electronics and instruments also indicate consistently 

high vitality scores in other categories. Other industries with lower sales per employee indices but high scores in job and sales vitality include 

building construction, food products, apparel, plastics, stone-clay-glass, industrial machinery, personal and business services. 

Communications did not rate well. The area’s vitality core is clearly aided by the Ohio regional plastics cluster, including plastics and industrial 

machinery operations.

Business out-migration tallied 0.6 percent from the 1996 pool of firms tracked, and 1.0 percent of survivors, slightly high for a District with this 

largely rural configuration. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared 

differs by the number of area firms that ceased operations in the interim.

0.72 0.92

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8B

2001 firms analyzed: 9,225

Startups:

785

12.5%

0.64

149 88

86 58% 1.23

832,990 1,035,802 24.3% 0.20

6 9 50% 0.75

905 726 80% 0.96

92,554 115,089 24% 0.84

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,182 95 2.27% 0.99

5,175 33 0.88

5,803 17 0.29%

6,180 3 0.0500% 0.87

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,059 12 0.2000% 1.04

0.64%

0.74

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity lags the national rate by more than one-third. While the survival rate of startups tracked from 1996 is high, all vitality rates 

among survivors trailed behind national and (with the exception of sales per employee) behind Regional averages.

Among value-added industries, startup rates were higher than average only in printing, primary metals, fabricated metals and health services. 

Communications, the technology-driven business services industry, professional and educational services were all quite weak. Not a single 

industry with more than one or two startup survivors indicated high sales per employee positioning. However, the number of surviving startups 

in specific industries was generally too low to develop conclusions regarding this or other startup survivor vitality measures.

Concentrations of high growth firms were 8 percent below the national average in aggregate, but two index points above Appalachian rates. 

The difference lay in the smaller employment classes, where the District showed most of its strength (in addition to a leading Class IV score 

among firms which began the analysis period with fewer than 50 jobs and ended with more than 100). It would appear from this index that 

this relative handful of dynamic firms is driving the District economy and its high survivor vitality patterns, partially – but far from entirely – 

compensating for the gap in entrepreneurial activity.

Aggregate : All Classes 6,180 115 1.86% 0.92
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8C

2001 firms analyzed: 22,881

Retention:

17,385 10,485

10,406 60% 1.19

462,142 810,766 75.4% 1.49

11 14 27% 0.65

178,859 149,196 83% 1.08

66,020 101,346 54% 0.98

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.19 0.62

Retained Firms

US = 1.00

ARC District 8C is administered by the Ohio Mid-Eastern Governments Association, including Belmont, Carroll, Columbiana, Coshocton, 

Guernsey, Harrison, Holmes, Jefferson, Muskingum and Tuscarawas Counties. One county is included in each of four MSAs linked to the 

region: Steubenville, Youngstown, Wheeling and Canton.

The District exhibits an unusual pattern of low startup activity coupled with leading concentrations of high growth firms. Many of these are 

within the smaller employment classes, suggesting that they may be young, if not startups. High retention rates are also complemented by 

national level sales per employee positioning and top-flight performance among surviving startup firms. With an increased focus on 

entrepreneurial activity, the District would establish a well-rounded, vital economic environment.

Overall business retention is 19 percent above national levels, and almost as high among startup firms. Impressive sales vitality indices have 

raised the District to sales per employee ratings within 2 percent of the national level. Job replenishment rates suggest good expansion 

activity among surviving firms. 

Sales per employee positioning is particularly strong in food products, fabricated metals, industrial machinery and transport equipment. 

Technology service and professional industries lag in this measure, but the technology-driven business services industry leads in all other 

measures. Food, fabricated metals and industrial machinery also score well in a variety of other vitality indices, as do wood products, 

petroleum and instruments.

The business out-migration rate is 0.5 percent from the original pool of firms tracked, and 0.8 percent of survivors, a relatively low set of rates 

and not a cause for concern. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared 

differs by the number of area firms that ceased operations in the interim.

0.98 1.10

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Ohio 8C

2001 firms analyzed: 22,881

Startups:

1,867

12.2%

0.62

413 224

221 54% 1.14

353,901 933,333 163.7% 1.34

5 10 100% 1.50

2,062 2,160 105% 1.26

58,983 93,333 58% 0.68

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,945 272 2.74% 1.19

12,713 86 0.93

14,286 54 0.38%

15,297 5 0.0300% 0.58

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,959 26 0.1700% 0.91

0.68%

0.95

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although the overall startup activity rate is 38 percent below the national average and the sales per employee index lags among surviving 

startups, survivor startup firms score well in every other index, including both sales and job vitality measures, suggesting growth that is 

bringing them to national sales per employee levels. Among manufacturers, a number of key industries demonstrate startup activity rates 

above the national industry averages, including furniture, plastics fabricated metals, electronics and transport equipment. Leading 

performance in multiple vitality measures is also displayed by surviving startups in food, furniture, printing, industrial machinery, transport 

equipment, and business services.

Aggregate concentrations of high growth firms run 10 percent above the national average and twenty index points ahead of the Appalachian 

Region. Concentrations peak in the smallest employment classes. Along with the strong performance of surviving startups, this may 

suggest that dynamism from newer firms may not be as bleak as the startup activity rates would indicate at first blush. While high growth 

concentrations drop with each succeeding (larger) employment class, they remain within 9 percent of the national level in all but the largest 

employment class (V) analyzed.

Aggregate : All Classes 15,297 340 2.22% 1.10
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9A

2001 firms analyzed: 29,165

Retention:

23,824 14,376

14,298 60% 1.19

485,535 735,590 51.5% 1.02

12 16 33% 0.80

268,986 221,108 82% 1.07

69,362 81,732 18% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.19 0.61

Retained Firms

US = 1.00

ARC District 9A is administered by the Northwest PA Regional Planning and Development Commission, including Clarion, Crawford, Erie, 

Forest, Lawrence, Mercer, Venango and Warren Counties. The Erie MSA is contiguous with Erie County, and the Sharon MSA is contiguous 

with Mercer County.

Despite serious difficulties in most entrepreneurial measures, the District indicates reasonable levels of vitality in the combination of retention 

and vitality patterns among surviving firms, both overall and in core industries. Higher startup vitality in the District’s two inclusive MSAs (still 

lagging national levels) suggest hope for district wide improvement down the road. The area’s high growth firms elevate the District’s 

aggregate high growth ranking just above the US average, and a major larger firm class (Class IV) is within 10 percent of the national target.

The overall retention rate for the business population and for the small number of startups hovers about 20 percent above national levels. This 

leading performance combines the higher rates often found in areas with low-entrepreneurial activity and the results of intensive regional 

retention efforts since the mid-nineties. While sales per employee positioning is still about 20 percent below national levels, the sales change 

index is two percent above the national average, indicating that the area’s position is improving. Job vitality levels among retained firms are 

mixed, and together suggest performance near the national level. Business out-migration is only 0.3 percent of the firms tracked from 1996, 

and 0.5 percent of surviving firms – slightly lower than might be anticipated in an area with this configuration. While the number of migrant 

firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased operations 

in the interim.

Among value-added industries, leading sales per employee positioning is evident in educational services, fabricated metals, oil and gas 

extraction, furniture, stone-clay-glass and instruments. Levels very close to the national index are also found in plastics, health services and 

wood products. Education, fabricated metals, stone-clay-glass and plastics also indicate other, consistently high vitality measures, as do 

textiles, apparel, printing, chemicals, industrial machinery, electronics and transport equipment. Both communications and business services 

(including computer) register several high vitality indices, although sales per employee are low. Engineering-research appears strong, 

although other professional and health services are mixed.

0.79 1.01

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9A

2001 firms analyzed: 29,165

Startups:

2,457

12.0%

0.61

604 350

346 57% 1.22

920,253 1,123,642 22.1% 0.18

10 15 50% 0.75

5,636 4,989 89% 1.06

102,250 124,849 22% 0.91

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

14,604 360 2.47% 1.07

18,409 128 0.96

20,753 67 0.32%

22,201 9 0.0400% 0.72

'96 Firms in Class High Growth 96-01 % High Growth US Index

21,668 37 0.1700% 0.90

0.70%

0.81

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity in the district is a startling 39 percent below national levels. The Appalachian startup activity index is 26 points higher. 

Although this level is not unduly below the general range of a Pennsylvania context, is it nevertheless problematic for the District. Notably, the 

two MSAs linked to the District show startup activity rates 11-14 points higher, implying still lower levels of entrepreneurial activity in the 

District’s more rural counties. Sales per employee positioning of surviving startups is within 9 percent of the US level, but both sales and job 

change indices are mainly low, suggesting that the sales per employee rate may be headed downward among startup survivors.

Higher startup rates can be found in some of the District’s core industries, including primary metals and plastics. Apparel, textiles and nondepository financial institutions also score well. The District’s core fabricated metals industry is within a few points of national startup levels, 

complementing high retention vitality scores. However, startup rates among electronics, instruments, communications, and business services 

– key technology driven industries – are low, as they are in most professional services.

Many of the same industries which score well in other categories also do well in retained startup measurements, including high sales per 

employee positioning in plastics and fabricated metal. Surviving startups in industrial machinery and the technology-driven business services 

industry (much in need regionally) also indicate multiple high vitality scores.

Aggregate concentrations of high growth firms are 1 percent above the national average, due entirely to high growth in the smallest 

employment class analyzed (starting with fewer than five jobs and ending with more than ten). However, indices are also close to national 

levels in both Class II and Class IV (starting with fewer than fifty jobs and ending with more than one hundred). These longer-term high 

growth firms appear to be keeping the District’s head above water while focus on stimulating and nurturing entrepreneurial startups is 

developed.

Aggregate : All Classes 22,201 457 2.06% 1.01
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9B

2001 firms analyzed: 9,509

Retention:

8,171 4,990

4,943 61% 1.20

564,791 685,891 21.4% 0.42

11 14 27% 0.65

85,268 69,381 81% 1.06

80,684 85,736 6% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.20 0.62

Retained Firms

US = 1.00

ARC District 9B is administered by the North Central PA Regional Planning and Development Commission, including Cameron, Clearfield, 

Elk, Jefferson, McKean and Potter Counties.

The area’s unusual economic configuration creates some ambiguous indicators, since the District’s many successful powdered metals firms 

occupy a statistical niche within several much larger industries which are not easily compared to more complete industry classifications. As a 

result, despite what are clearly high vitality firms, industry comparisons might lag. In general terms, however, the District indicates very high 

retention rates and positive replenishment rates, suggesting good expansion activity among surviving firms. Startup rates are a serious 

concern – as they are throughout Pennsylvania – but high growth concentrations are strong in aggregate and among three of five classes 

measured individually, reinforcing the notion that area vitality is carried by a set of mature high growth firms in core industries.

The District’s overall retention rate is 20 percent above the national average – and retention among the area’s relatively scarce startup 

population is even higher. The stable strength and unusual classification of the area’s dominant powder metals firms tends to depress some 

vitality scores, although overall job replenishment rates are high. Similarly, sales per employee rates are depressed by some of the District’s 

vigorous but lower value-added powder metals firms. In addition, the transformation of some PM firms into branch facilities in recent years 

(excluded from the sales-related analyses) would tend to depress sales figures. Business out-migration is 0.6 percent of the original pool of 

1996 firms, and 0.9 percent of survivors, slightly higher than what would be expected in a rural district like this one. While the number of 

migrant firms is the same in both calculations, the pool of firms to which they are compared differs by the number of area firms that ceased 

operations in the interim.

The difficulty of applying standard measures to this District are focused by a look at the three industries which include the bulk of its powder 

metals operations – primary metals, fabricated metals and industrial machinery. All three reflect high retention and very high sales and job 

vitality among retained firms – yet low sales per employee rates, which is probably in part a reflection of very viable, yet low value valueadded powder metals firms (just one component of the District’s PM industry). Other industries which indicate consistent high vitality scores 

include furniture, electronics, instruments. Business services and communications vitality is poor, although sales per employee indicators are 

high in both industries.

0.82 0.97

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9B

2001 firms analyzed: 9,509

Startups:

829

12.1%

0.62

186 116

114 61% 1.31

557,265 522,549 -6.2% 0.00

11 14 27% 0.41

1,857 1,611 87% 1.04

79,609 74,650 -6% 0.54

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,288 116 2.19% 0.95

6,490 36 0.77

7,207 28 0.39%

7,632 3 0.0400% 0.70

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,463 15 0.2000% 1.06

0.55%

0.98

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The startup rate is 38 percent below national averages, and fully 25 points below that of the Region. However, startup activity is high in food 

products, primary and fabricated metals (again, these are key powder metals-related classifications). Startup rates in communications, 

business services, most retail and professional services (except legal) are low.

Surviving startups from the 1996 pool do not appear strong in aggregate measures. Top vitality performers among them include furniture and 

primary metals, and several retail industries as well as legal services. Only a handful of startup industries demonstrate high sales per 

employee positioning.

Aggregate high growth concentrations are only 3 percent below the national average and seven index points ahead of Appalachia. 

Concentrations are high in both small and larger employment classes analyzed, probably reflecting sustaining growth engines among the 

District’s powdered metals clusters, including PM components producers and support industries, largely in industrial machinery 

classifications.

Aggregate : All Classes 7,632 150 1.97% 0.97
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9C

2001 firms analyzed: 7,458

Retention:

5,900 3,421

3,385 57% 1.14

359,801 491,609 36.6% 0.72

9 13 44% 1.07

52,506 42,388 81% 1.05

71,960 81,935 14% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.14 0.49

Retained Firms

US = 1.00

ARC District 9C is administered by the Northern Tier Regional Planning and Development Commission, including Bradford, Sullivan, 

Susquehanna, Tioga and Wyoming Counties. Wyoming County is also part of the Scranton-Wilkes Barre MSA. 

This small District indicates a high overall business retention rate and startup retention just below national levels. However, sales vitality 

among retained firms is low despite good job growth rates, leading to marginal sales per employee positioning. Most importantly, both startup 

activity and growth firm concentrations lag quite seriously, raising the specter of a modest vitality outlook now and in future years.

At 14 percent above average, the District’s overall retention is characteristic of many modest growth areas with correspondingly low 

entrepreneurial activity. Overall sales vitality is more than one-quarter below US levels and far behind the Region, dovetailing into a lagging 

sales per employee rate. Business out-migration is 0.6 percent of the 1996 pool of firms tracked, and 1.1 percent of survivors – a relatively 

high proportion for a rural area. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared 

differs by the number of area firms that ceased operations in the interim.

Sales per employee rates are higher than US levels, however, in a number of the area’s core industries, including food, wood products, 

communications and educational services, which also reflect a string of high vitality measures. Chemicals, stone-clay-glass, fabricated metals 

and electronics also indicated multiple high vitality rates but low sales per employee. In most of these, job vitality measures outstrip sales 

vitality.

0.79 0.47

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9C

2001 firms analyzed: 7,458

Startups:

526

9.5%

0.49

138 66

64 46% 0.99

259,091 260,656 0.6% 0.00

4 4 0% 0.00

505 273 54% 0.65

64,773 65,164 1% 0.47

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,072 46 1.13% 0.49

4,874 20 0.57

5,366 9 0.17%

5,603 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,527 3 0.0500% 0.29

0.41%

0.42

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The overall startup activity rate troughs at 49 percent of the national average. Coupled with only average startup survival rates and extremely 

low vitality measures among the handful of startup firms, this is clearly a bad situation. Startup activity is high in electronics and low in virtually 

every other significant value added industry – at average levels in stone-clay-glass and 81 percent of the national average (still much higher 

than the District average) in industrial machinery. Startup activity rates in the nearby Scranton MSA lag US levels significantly – but still 

register 29 index points above the District.

The small scale of the surviving startup pool (under 100 firms) makes industry specific analysis of startup vitality difficult. However, of the lot, 

only food stores, restaurants, hotels and social services indicate leading sales per employee rates, and only restaurants and business 

services exhibit consistently high vitality scores. Solid job and sales vitality scores in business services are a good sign despite startup activity 

rates only slightly more than half of the national average.

High growth firm concentrations are extremely low, 47 percent of the national level in aggregate. In no class does the District’s index climb 

above 57 percent of the national average, leaving the area without an adequate cadre of either entrepreneurs or more mature high growth 

engines. Existing growth firms and specific vital industries seem to carry the District, but new drive is needed to forge ahead more rapidly.

Aggregate : All Classes 5,603 53 0.95% 0.47
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9D

2001 firms analyzed: 39,163

Retention:

36,401 20,869

20,750 57% 1.13

439,316 656,807 49.5% 0.98

11 14 27% 0.65

365,875 280,328 77% 1.00

73,219 82,101 12% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.13 0.64

Retained Firms

US = 1.00

ARC District 9D is administered by the Economic Development Council of Northeastern PA, including Carbon, Lackawanna, Luzerne, 

Monroe and Pike Counties. Carbon County is included in the Allentown-Bethlehem MSA, Lackawanna and Luzerne include the largest 

portion of the Scranton-Wilkes Barre MSA, and Pike County is at the western edge of the New York-Northern New Jersey MSA. 

This District’s scores emphasize the strengths and weaknesses of the Region overall. Much like the Region, retention rates are high among 

startups and businesses overall – and higher than the Region’s measures. And, like the Region, entrepreneurial activity and concentrations 

of growth firms lag the nation – but again, more intensively. At the same time, the District’s growth indices among surviving firms paint a 

picture of solid, stable vitality which is slowly inching up on a lagging sales per employee rate.

High retention rates are coupled with nationally comparable levels of job replenishment and sale vitality in aggregate. Business out-migration 

is a low 0.3 percent of firms from the 1996 pool tracked, and 0.6 percent of survivors. While the number of migrant firms is the same in both 

calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim. Sales per 

employee rates are within a few points or above national levels in a variety of value-added industries, including wood products, furniture, 

paper, printing, chemicals, plastics, stone-clay-glass, primary metals and industrial machinery. Sales per employee rates are also high in the 

insurance industry and near US levels in motor freight and the array of professional services. Communications and business services lag. 

Several industries also indicate high scores in multiple vitality indices, including building construction, chemicals, primary metals, electronics 

and transport equipment. The overall retention picture, while not overwhelmingly positive, is one of significant strengths in core industries, 

including several which indicate good sales per employee positioning. Many of the most positive indicators overlap from the three MSAs 

linked to the District.

0.79 0.74

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9D

2001 firms analyzed: 39,163

Startups:

3,364

12.5%

0.64

925 483

475 51% 1.10

828,843 654,265 -21.1% 0.00

9 9 0% 0.00

7,693 4,301 56% 0.67

82,884 93,466 13% 0.68

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

23,904 419 1.75% 0.76

28,910 139 0.66

32,014 90 0.28%

33,881 11 0.0300% 0.58

'96 Firms in Class High Growth 96-01 % High Growth US Index

33,185 44 0.1300% 0.70

0.48%

0.71

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are extremely low (64 percent of the US average), considerably lower than the still lagging Scranton-Wilkes Barre and 

Allentown MSAs linked to the District. (The New York MSA, also linked, has a startup activity rate comparable to the national average.) Rates 

are higher than average in only a handful of value added industries, including textiles and fabricated metals. (Because of the intensive 

concentration on branch recruitment in this area, it is worth pointing out that startup activity rates do not include branch facilities.) Startup 

rates in technology service industries (communications, business services) lag at about the level of the District overall.

Likewise, sales per employee positioning among surviving startups is weak. While aggregate measures among surviving startups appear very 

low, higher levels of sales or job change seem evident in textiles, industrial machinery, real estate, business, legal and educational services.

Aggregate high growth concentrations are 26 percent below national averages, a level that holds generally true throughout all employment 

classes. While still lagging US patterns, levels in the Allentown MSA are ten points or so higher and, while New York concentrations are 

lower than average, the sheer volume of firms involved provides opportunities for the District.

Aggregate : All Classes 33,881 509 1.50% 0.74
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9F

2001 firms analyzed: 18,206

Retention:

15,475 9,201

9,142 59% 1.17

516,668 665,082 28.7% 0.57

11 14 27% 0.65

161,618 128,757 80% 1.03

86,111 95,012 10% 0.91

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.17 0.55

Retained Firms

US = 1.00

ARC District 9F is administered by the Southern Alleghenies Regional Planning and Development Commission, including Bedford, Blair, 

Cambria, Fulton, Huntingdon and Somerset Counties. Blair County is contiguous with the Altoona MSA, while Cambria and Somerset 

Counties comprise the entire Johnstown MSA.

The District exhibits a vitality pattern common to modest growth areas, including high retention rates among startups and firms overall, 

coupled with very low startup activity rates. Lagging concentrations of high growth firms are mainly concentrated outside the two MSAs linked 

to the District, both of which trail US patterns but are within 2 percent-7 percent of US levels. District sales per employee positioning shows 

strength, only 9 percent below the national index.

While retention rates throughout the District are high, vitality among retained firms appears sluggish. Lower sales vitality rates appear 

concentrated outside the Altoona MSA. The District’s relatively good sales per employee positioning is particularly noteworthy in the context of 

weak sales vitality over the analysis period. Above average job replenishment rates suggest some good expansion activity among surviving 

firms. At 0.4 percent of the firms from the original 1996 pool and 0.6 percent of survivors, business out-migration is not a serious concern. 

While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area 

firms that ceased operations in the interim.

Sales per employee indices are high in both resource-based industries (mining and stone-clay-glass) and a string of metalworking industries, 

including fabricated metals, industrial machinery, electronics and transportation equipment. A large number of manufacturing industries 

display consistently high vitality rates among surviving firms, including wood products, furniture, paper products, chemicals, primary and 

fabricated metals, industrial machinery and electronics. Supplying many of these, the durable wholesale industry shows high ratings as well. 

Among value-added services, multiple high indices in engineering-research stand out. The retail resurgence in sections of the District is led by 

high vitality indices in the restaurant industry.

0.91 0.87

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9F

2001 firms analyzed: 18,206

Startups:

1,392

10.7%

0.55

364 202

198 54% 1.16

457,466 657,865 43.8% 0.36

9 15 67% 1.00

2,993 2,971 99% 1.19

76,244 82,233 8% 0.60

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,826 207 2.11% 0.92

12,211 78 0.88

13,597 48 0.35%

14,399 6 0.0400% 0.74

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,086 22 0.1600% 0.82

0.64%

0.89

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are alarmingly low in the District and, although surviving startups tend to have levels of job growth at or above the US 

average, sales vitality is extremely limited and sales per employee rates quite low in aggregate. In general, this is a pattern carried through 

the District’s MSAs.

Among manufacturers, startup activity leads US patterns in printing, primary metals, fabricated metals and transport equipment. Startup rates 

in industrial machinery lag US trends but are considerably higher than the District average, which is also the case for the technology-driven 

business services group. While retail startup rates are surprisingly low, this may be due to an influx of new branch retail facilities, which are 

excluded from this entrepreneurial startup measure.

Among those startups which did develop, the area’s thirst for retail and services is clear. Surviving retail startups scored consistently well 

vitality indices, as did personal services and an array professional services, including engineering and legal. The core of manufacturing 

industries which led in startup activity and retention also scored well among those startups surviving from 1996: wood products, fabricated 

metals, industrial machinery and electronics. Surviving motor freight startups rated well in all vitality categories.

District high growth concentrations lag the US by about 13 percent. High growth indices are several points higher in each of the MSAs 

wholly included in the District, suggesting that at least some of the non-MSA counties indicate lower county scores. One of the strengths of 

the MSAs within the District is the spread of high growth firms throughout employment classes, producing a compensatory effect on the lack 

of new firm dynamism. However, this factor is not as evident in the District overall, suggesting opportunities to capture future expansion 

activity of high growth firms through branch development just outside the MSAs.

Aggregate : All Classes 14,399 254 1.76% 0.87
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9G

2001 firms analyzed: 25,137

Retention:

21,515 12,616

12,539 58% 1.16

464,868 586,248 26.1% 0.51

12 16 33% 0.80

245,002 200,579 82% 1.06

77,478 83,750 8% 0.81

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.16 0.57

Retained Firms

US = 1.00

ARC District 9G is administered by the SEDA-Council of Governments, including Centre, Clinton, Columbia, Juniata, Lycoming, Mifflin, 

Montour, Northumberland, Perry, Snyder and Union Counties. Centre County is contiguous with the State College MSA and Lycoming 

County with the Williamsport MSA. Columbia County is included in the Scranton-Wilkes Barre MSA and Perry in the Harrisburg MSA.

This District evidences a common pattern of high business retention rates (among all firms and the startup breakout) with low levels of 

entrepreneurial activity and relatively weak concentrations of high growth firms. By far, the State College MSA (Centre County) is the 

strongest economic pole in the District, with substantially higher scores in every category. Indices in the other significantly linked MSA, 

Williamsport, correspond closely to District patterns.

Retention rates in the District run 16 percent above the national average, 19 percent higher among startup firms. However, vitality indices 

among retained firms are considerably lower, especially in the sales category, yielding a correspondingly low (0.81) sales per employee rate 

overall. By contrast, retained firms in the State College MSA out-performed national levels in both sales and job vitality indices, making 

progress despite low sales per employee levels. Business out-migration is 0.4 percent from the original pool of firms tracked, and 0.6 percent 

of survivors, about average. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared 

differs by the number of area firms that ceased operations in the interim.

On an industry-specific basis, District sales per employee rates were higher than average in only a handful of industries, but very 

concentrated in heavy manufacturing: in fabricated metals, industrial machinery, electronics and transport equipment, as well as in stone-clay 

glass and agricultural services. Vitality indices were high across multiple categories in a slightly larger range of industries, including wood 

products, furniture, paper products, chemicals, primary metals, fabricated metals, industrial machinery, electronics, motor freight transport, 

legal services and engineering. District vitality in communications and business services lagged leading rates in the State College MSA.

0.81 0.78

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9G

2001 firms analyzed: 25,137

Startups:

1,934

11.1%

0.57

543 307

302 56% 1.19

697,264 970,588 39.2% 0.32

8 10 25% 0.38

3,975 2,870 72% 0.87

77,474 107,843 39% 0.78

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

14,015 273 1.95% 0.85

17,162 95 0.76

19,055 50 0.26%

20,169 5 0.0200% 0.44

'96 Firms in Class High Growth 96-01 % High Growth US Index

19,780 18 0.0900% 0.48

0.55%

0.66

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity in the District was only 57 percent of the national average. Slightly higher levels in the several linked MSAs suggest even 

lower rates in District counties outside the wholly included MSAs. While retained startup vitality in the Williamsport MSA is poor, State 

College’s enormously vital retained startup group failed to create a major influence in the District, where overall startup vitality ratings are 

extremely weak.

In fact, startup activity itself rises above national averages in only a small number of industries, including printing, primary metals and 

transport equipment, the latter two with relatively small numbers of firms. Rates approach the national average in fabricated metals. Although 

startup activity in communications and industrial machinery are each more than 20 percent below national averages, they are substantially 

above the District average level.

Among surviving startups, electronics and legal firms stand out for leading indices across the board – sales per employee, sales and job 

change. Other industries with consistently high vitality indices (but lower sales per employee positioning) include wood products, fabricated 

metals, industrial machinery, motor freight and engineering-research. An array of retail industries and personal services also score well.

In contrast to the leading performance of the State College MSA, the District overall demonstrates high growth concentrations somewhat 

under both the national average and Regional levels. Scores range no higher than 0.85 in the smallest employment class, and descend as 

firms in employment classes become larger. As much as the retention vitality measures, this indicator suggest a need for the District to 

develop spillover opportunities from the State College area in an effort to more widely spread the economic vitality evident there.

Aggregate : All Classes 20,169 321 1.59% 0.78
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9H

2001 firms analyzed: 101,985

Retention:

93,746 53,280

53,102 57% 1.12

544,037 1,000,462 83.9% 1.65

12 17 42% 1.00

1,051,222 896,843 85% 1.11

90,673 111,162 23% 1.07

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.65

Retained Firms

US = 1.00

ARC District 9H is administered by the Southwestern PA Regional Development Council, including Allegheny, Armstrong, Beaver, Butler, 

Fayette, Greene, Indiana, Washington and Westmoreland Counties. Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland also 

comprise the Pittsburgh MSA.

Because of the almost complete overlap, vitality indices in the Pittsburgh MSA virtually mirror those in the District. The exception is in the 

startup activity index, which is 65 percent of the national average in the District, seven index points below the MSA level. In both areas, 

retention rates run more than 10 percent above average, and concentrations of high growth firm’ are virtually even with the US average.

The vitality of retained firms in the District – again, mirroring MSA rates – is remarkable. In addition to retention rates 12 percent above 

average, all vitality indicators lead US indices. The current sales per employee rate for retained firms beats the US average by 7 percent. 

Business out-migration is only 0.2 percent of the 1996 pool of firms tracked, and only 0.3 percent of survivors. While the number of migrant 

firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in 

the interim.

Current retained firm sales per employee positioning is high in several construction industries (including heavy construction), as well as the 

District’s traditional primary and fabricated metals industries. Plastics and electronics also register high sales per employee positions, as do 

motor freight, durable wholesale, banks, personal services and all professional and educational services (only engineering lags national levels 

about 10 percent). Consistently high vitality rates among retained firms are also evident in coal and other non-metallic mining, the several 

construction industries, textiles and apparel, furniture, chemicals, plastics, stone-clay-glass, industrial machinery, electronics, technology 

driven business services and less clearly, communications.

1.07 0.99

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Pennsylvania 9H

2001 firms analyzed: 101,985

Startups:

8,694

12.6%

0.65

2,545 1,356

1,339 53% 1.12

727,246 1,098,663 51.1% 0.42

8 15 88% 1.31

20,062 19,470 97% 1.17

90,906 109,866 21% 0.80

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

57,775 1,381 2.39% 1.04

72,051 547 1.05

81,149 306 0.38%

86,627 61 0.0700% 1.26

'96 Firms in Class High Growth 96-01 % High Growth US Index

84,672 192 0.2300% 1.19

0.76%

0.95

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The weakest link in District performance, startup activity is only 65 percent of the national average, more than 20 index points below the 

average Appalachian level. Startup rates are low across the board; the only significant industry with rates approaching the national average is 

transport equipment. A number of the district’s higher vitality industries score startup activity rates only in the range of 80 percent-85 percent 

of the industry average.

Vitality scores among surviving startups are generally stronger. While sales vitality lags far behind over the period analyzed, both job vitality 

measures are strong. The combination leads to a sales per employee index of 0.80, suggesting very strong original sales among the startup 

group which did not keep pace with national levels. At the same time, current sales per employee positioning of surviving startups in a number 

of core District industries is very strong, including primary and fabricated metals, industrial machinery, electronics and health. Vitality indices 

are strong across multiple categories in stone-clay-glass, primary metals, industrial machinery, motor freight and transport services, 

brokerages, health and legal services.

Mirroring strong retention vitality patterns and MSA performance, the District’s high growth concentrations are strong across the board with 

an aggregate score of 0.99 and indices beating the national level in four of five employment classes, including the smallest and largest. The 

dynamism indicated by retained firms in the District (both high and “normal” growth) goes a long way toward compensating for the continued 

weakness in entrepreneurial activity.

Aggregate : All Classes 86,627 1,745 2.01% 0.99
ARC Firm Formation and Retention Analysis 1996-2001

ARC South Carolina 10A

2001 firms analyzed: 39,138

Retention:

31,528 16,378

16,286 52% 1.03

610,212 841,809 38.0% 0.75

15 20 33% 0.80

453,780 326,232 72% 0.93

87,173 93,534 7% 0.90

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 0.94

Retained Firms

US = 1.00

ARC District 10A is administered by the South Carolina Appalachian Council of Governments, including Anderson, Cherokee, Greenville, 

Oconee, Pickens and Spartanburg Counties. All Districts counties except Oconee are also included in the Greenville-Spartanburg MSA.

The significant overlay between the District and the MSA creates corresponding close vitality images. In general, District indices run a few 

points lower than the MSA, suggesting some lag in Oconee County, but without a significant District-wide impact. All discussion of District 

and MSA vitality measures should be understood in the context of very significant branch development activity in the area. Due to the nature 

of the analysis, branch facilities are excluded from entrepreneurial, sales per employee and sales vitality figures – in this case effectively 

penalizing resulting District measures.

Even when branches are excluded from these measures, however, the District performs close to US levels. Entrepreneurial vitality runs six 

percent below the national average (and seven index points above the Region).

Overall retention rates are above national levels. Job and sales vitality among retained firms is lower, but the time series tracked firms from 

1996, before some of the area’s new growth had developed – and without the benefit of branch facilities. At the same time, the MSA shows 

substantially higher sales vitality patterns, suggesting lower scores in non-MSA District counties.

The District indicates excellent sales per employee positioning among retained firms in a host of non-durable industries: wood products, 

furniture, paper products, chemicals and stone-clay-glass. Among durables, electronics and transport equipment stand out, but several 

others, including fabricated metals and industrial machinery are within reach of national levels. Both air and motor freight transport are wellpositioned, as are health and educational services. Reflecting strong development demand, building construction scores well in both job and 

sales vitality indices among retained firms, as do printing, chemicals, all metalworking industries, instruments, technology-driven business and 

legal services.

Business out-migration is 0.3 percent of firms tracked from the original 1996 pool and 0.6 percent of survivors – not a significant issue in the 

context of the District. While the number of migrant firms is the same in both calculations, the pool of firms to which they are compared differs 

by the number of area firms that ceased operations in the interim.

0.90 0.96

0.80

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC South Carolina 10A

2001 firms analyzed: 39,138

Startups:

4,671

18.3%

0.94

1,441 628

617 43% 0.91

586,622 784,882 33.8% 0.28

6 14 133% 2.00

8,699 8,293 95% 1.15

83,803 87,209 4% 0.63

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

19,355 459 2.37% 1.03

24,216 165 0.94

27,308 112 0.41%

29,263 17 0.0600% 1.04

'96 Firms in Class High Growth 96-01 % High Growth US Index

28,549 54 0.1900% 1.00

0.68%

1.04

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates approach national averages, but run ten index points behind the MSA. Like the MSA, job vitality among surviving 

startups is very strong, but sales vitality is much weaker. Sales per employee rates are low. Again, the area’s strong branch facilities are not 

included in this analysis.

Aside from traditional strength in wood products, startup activity rates are highest in those manufacturing industries most likely to complement 

the area’s large industrial complexes – in plastics, primary and fabricated metals, industrial machinery and, of course, transport equipment, 

including auto components. Startups lead national rates in all motor freight, air transport and transportation services. Not surprisingly, several 

banking industries and engineering-research are also strong.

Only a handful of industries reflect superior sales per employee positioning among surviving startups, but these are critical groups to the 

region: plastics, fabricated metals, industrial machinery, transport equipment, motor freight transport, and the technology-driven business 

services group. Along with many of these, surviving startups in several other industries show high job and sales vitality scores, including food 

products, textiles, furniture, chemicals and legal services.

High growth concentrations are near national levels in all employment classes measured, never ranging more than 6 percent below or more 

than 4 percent above national averages. While not a real negative, the District’s scores are significantly below those of the MSA, from which 

future high growth branch opportunities should be sought.

Aggregate : All Classes 29,263 572 1.95% 0.96
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11A

2001 firms analyzed: 11,696

Retention:

7,954 4,633

4,614 58% 1.15

454,430 635,486 39.8% 0.79

11 15 36% 0.87

86,282 69,048 80% 1.04

64,919 79,436 22% 0.76

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.15 0.74

Retained Firms

US = 1.00

ARC District 11A is administered by the Upper Cumberland Development District, including Cannon, Clay, Cumberland, De Kalb, Fentress, 

Jackson, Macon, Overton, Pickett, Putnam, Smith, Van Buren, Warren and White Counties. None are linked to MSAs.

Although scores are slightly more elevated than is the case in other situations, the District’s vitality indices follow the general pattern of 

modest growth Regional Districts, including high levels of business and startup retention coupled with low startup activity rates and low-tomodest concentrations of high growth firms. The District’s overall sales per employee indicator is about three-quarters of the national level.

The District’s overall retention vitality measures are far better than those in many other LDDs, but still lag behind national levels and Regional 

averages. Both sales and job change vitality measures trail behind US and Appalachian rates, although the job replenishment score is slightly 

better than both. Business out-migration is a scant 0.2 percent of firms from the 1996 pool, and 0.4 percent of survivors. While the number of 

migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased 

operations in the interim.

Among significantly-sized industries, only three -- fabricated metals, motor freight and personal services – indicate higher than average sales 

per employee rates. Of the three, only fabricated metals reflects consistently high vitality scores in job and sales categories. However, large 

numbers of value-added industries outperform national averages in job and sales vitality ratings outside the sales per employee index, 

including heavy construction, wood products, paper products, chemicals, plastics, stone-clay-glass, primary metals, industrial machinery, 

electronics and transport equipment. Communications and business services also weigh in with very impressive performances for an area 

without metropolitan links.

0.76 0.90

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11A

2001 firms analyzed: 11,696

Startups:

1,131

14.4%

0.74

235 111

111 47% 1.01

328,472 668,269 103.4% 0.85

9 13 44% 0.67

1,956 1,434 73% 0.88

41,059 55,689 36% 0.40

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,232 112 2.14% 0.93

6,358 36 0.78

7,033 22 0.31%

7,475 2 0.0300% 0.48

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,291 7 0.1000% 0.51

0.57%

0.79

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are 26 percent below the national average, and although startup retention is slightly above the US level, vitality among 

surviving startups is weak in all categories – and the sales per employee rate is very low. Among significant industries, the startup rate is high 

only in furniture, fabricated metals (a retention stronghold as well) and health services. The relatively low number of surviving startup firms 

(and their wide distribution) makes industry-specific analysis difficult.

The aggregate concentration of high growth firms is about 10 percent below US levels, primarily concentrated in the smallest employment 

class (starting with fewer than five employees and growing to more than ten) where the District index was 0.93. Aggregate and small class 

scores are on a par with Appalachian rates.

Aggregate : All Classes 7,475 137 1.83% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11B

2001 firms analyzed: 41,408

Retention:

30,944 16,438

16,374 53% 1.05

515,683 848,429 64.5% 1.27

13 17 31% 0.74

386,633 282,298 73% 0.95

73,669 94,270 28% 0.91

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.05 0.97

Retained Firms

US = 1.00

ARC District 11B is administered by the East Tennessee Development District, including Anderson, Blount, Campbell, Claiborne, Cocke, 

Grainger, Hamblen and Jefferson Counties. Anderson, Blount, Knox, Loudon, Sevier and Union are also included in the Knoxville MSA.

This large District includes very significant overlap with the Knoxville MSA, a correspondence easily viewed in the vitality ratings of the two. 

The District’s indices all hover at or near US levels, creating an overall picture of economic solidity which leads Appalachian rates. However, 

the District lags significantly behind Knoxville’s leading startup activity rate. Identification of opportunities to capture more of the MSA’s 

entrepreneurial vitality is undoubtedly high on the District’s to do list.

Overall retained firm vitality measures are anchored by a retention rate 5 percent above the US average and very impressive sales vitality 

indices averaging 27 percent above the US level. This is especially notable as a complement to high job replenishment rates (but a somewhat 

lagging job vitality index). Sales per employee indicators are within 9 percent of national norms and rising. Retention vitality ratings track those 

of the MSA closely. Business out-migration is only 0.2 percent of the 1996 pool of firms tracked, and 0.4 percent of survivors. While the 

number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that 

ceased operations in the interim.

High sales per employee indicators among survivor firms are found in food products, plastics, leather, stone-clay-glass, primary and 

fabricated metals and transport equipment. Wholesale operations and rail and motor freight transport are also positioned well, along with 

health and educational services. Aside from current positioning, a number of value added industries also delivered leading performance in 

both sales and job vitality measures, including building construction, food products, furniture, petroleum, plastics, stone-clay-glass, primary 

metals, industrial machinery, transport equipment and instruments.

0.91 0.99

0.80

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11B

2001 firms analyzed: 41,408

Startups:

5,166

19.0%

0.97

1,103 512

508 46% 0.98

802,145 1,246,035 55.3% 0.45

8 16 100% 1.50

8,407 7,764 92% 1.11

100,268 95,849 -4% 0.70

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

18,680 461 2.47% 1.07

23,702 158 0.92

26,940 99 0.37%

28,822 17 0.0600% 1.05

'96 Firms in Class High Growth 96-01 % High Growth US Index

28,182 60 0.2100% 1.12

0.67%

0.93

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While lagging the linked Knoxville MSA by twenty-one index points, the District’s startup activity rate is only slightly below the national 

average. National level and leading rates are found in most construction industries, apparel, paper products, plastics, stone-clay-glass, 

primary and fabricated metals, industrial machinery, transport equipment, instruments, motor and water transport as well as transport 

services, wholesale industries and engineering-research. Startup rates in the technology-driven business services industry lag US rates in the 

District considerably (but are higher in the MSA).

Retained startups tend to show high levels of job vitality but lagging sales vitality rates, yielding a low sales per employee score. This is also 

the case in the MSA, but there each of the scores is elevated beyond the District’s level. Leading startup sales per employee rates in the 

District are found in several of the same industries which displayed high vitality in other categories, including food products, furniture and 

transport services. Business services is a welcome high performer in this measure. Both high job and high sales vitality scores are indicated 

for retained startups among special trades contractors, textiles, plastics, stone-clay-glass, primary metals, electronics, transport equipment, 

instruments and social services.

Concentrations of high growth firms are within range of US levels in aggregate scores, and high among Class II firms (began with fewer than 

ten jobs and end with more than twenty-five) and in Class IV (began with fewer than fifty jobs and ended with more than one hundred). This 

impressive distribution, coupled with solid startup activity and consistently high indices among a set of the District’s core industries is 

encouraging indeed. Additional dynamism gleaned from the MSA’s entrepreneurial base would significantly enhance overall performance.

Aggregate : All Classes 28,822 580 2.01% 0.99
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11C

2001 firms analyzed: 15,797

Retention:

13,607 7,641

7,615 56% 1.11

465,840 635,872 36.5% 0.72

14 17 21% 0.51

183,300 125,546 68% 0.89

66,549 79,484 19% 0.76

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.11 0.69

Retained Firms

US = 1.00

ARC District 11C is administered by the First Tennessee Development District, including Carter, Greene, Hancock, Hawkins, Johnson, 

Sullivan, Unicoi and Washington Counties. Carter, Hawkins, Sullivan, Unicoi and Washington are also included in the Johnson City-Kingsport 

MSA.

The District closely tracks vitality ratings in the MSA with the exception of the startup activity index. Although the index is quite low in both 

areas, the District’s rating (69 percent of the national average) lags seven index points behind the MSA. Both trail the Region by a significant 

margin as well. Overall and startup retention both lead national rates, but concentrations of high growth firms trail the US level by 16 percent 

and Appalachia by six index points. The sales per employee index lags both national activity and Appalachia by considerable margins. The 

general vitality picture is one of an area with a core of stability but only modest patterns of new and dynamic activity.

While the District’s retention rate is high, vitality among retained firms is modest in overall scoring. Sales vitality, job vitality and replenishment 

all fall below national and Regional averages, contributing to a general sales per employee index about 24 percent below the national level. 

Sales per employee positioning leads national trends in textiles, electronics and miscellaneous retail. A larger number of industries score well 

among survivors in both job and sales vitality indices, including building construction – a sign of local development confidence – wood and 

paper products, plastics, industrial machinery, industries related to all transportation modes and services, legal services and selected retail 

segments. The technology-driven business services industry is progressing and reflects high vitality measures in several categories, although 

communications lags. Business out-migration is slightly less than 0.2 percent from the 1996 pool, and 0.3 percent of survivors – not a cause 

for concern. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the 

number of area firms that ceased operations in the interim.

0.76 0.84

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11C

2001 firms analyzed: 15,797

Startups:

1,410

13.4%

0.69

404 201

199 49% 1.05

484,436 602,260 24.3% 0.20

10 21 110% 1.65

3,890 4,048 104% 1.25

80,739 86,037 7% 0.62

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

8,524 177 2.08% 0.90

10,684 64 0.83

11,977 39 0.33%

12,756 6 0.0500% 0.84

'96 Firms in Class High Growth 96-01 % High Growth US Index

12,501 19 0.1500% 0.80

0.60%

0.82

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The startup activity rate is a sluggish 31 percent below national levels, and eighteen index points behind Appalachia. While retention among 

startups is high (not uncommon in areas with modest entrepreneurial activity) sales vitality among surviving startups appears low overall, 

while job vitality measures are higher.

Startup activity rates are generally highest in industries which also indicate good general local positioning or high vitality measures among 

retained firms, including textiles, paper, plastics and electronics. Stone-clay-glass, primary metals and, to a lesser extent, furniture, also 

reflect solid startup activity ratings. Both communications and business services lag.

Surviving startups in furniture also indicate high sales per employee ratings, as do retained engineering starts from the 1996 pool. Paper 

products survivors show high levels of sales and job vitality, while engineering and business service survivors indicate good sales vitality 

levels. Personal services startups achieved high vitality ratings in several categories. A larger number of surviving startups showed leading 

job vitality scores.

Aggregate concentrations of high growth firms trail US levels by 16 percent. The District’s rating did not climb above 0.90 in any single 

category, nor did it fall beyond 80 percent of the national level. While a significant raw number of district firms are in the high growth bracket, 

most of these are quite small, and would have a hard time compensating for the lack of larger firm concentrations as well as the lag in the 

District’s entrepreneurial activity levels.

Aggregate : All Classes 12,756 217 1.70% 0.84
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11D

2001 firms analyzed: 3,492

Retention:

2,762 1,539

1,526 55% 1.10

417,761 547,252 31.0% 0.61

12 13 8% 0.20

30,752 19,561 64% 0.83

69,627 78,179 12% 0.75

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.73

Retained Firms

US = 1.00

ARC District 11D is administered by the South Central Tennessee Development District, including Coffee and Franklin Counties. Neither is 

within a related MSA.

This small District reflects a classic modest vitality pattern of high retention rates among both firms overall and startups, coupled with rather 

low startup activity, weak high growth firm concentrations and low sales per employee indices. In this case, all three of the latter are about 

one-quarter below US trend, and substantially below Appalachian averages as well.

While overall retention rates are high, vitality among surviving firms is quite weak in job and especially sales vitality categories. The District’s 

sales per employee index, at 0.75, has been weakened by 1996-2001 sales vitality. Business out-migration is 0.4 percent of the 1996 pool of 

firms tracked, and 0.8 percent of survivors, this last slightly high for an area with this configuration, but not it’s biggest issue. While the 

number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that 

ceased operations in the interim.

Throughout the District, only some agricultural production and services, leather and a single retail segment evidence leading sales per 

employee positioning. Agricultural services is also a consistent leader in other vitality indices. More encouragingly, a broad number of value 

added industries indicate high sales and job vitality indices among retained firms, suggesting that area vitality measures will progress as 

these industries gain strength and numbers. Consistently high scorers include wood products, chemicals, plastics, industrial machinery, 

electronics, transport equipment among manufacturers. Leading service segments include communications, personal and legal services.

0.75 0.72

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11D

2001 firms analyzed: 3,492

Startups:

327

14.2%

0.73

74 40

39 53% 1.13

632,000 522,857 -17.3% 0.00

9 13 44% 0.67

633 506 80% 0.96

90,286 87,143 -4% 0.63

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,780 32 1.80% 0.78

2,218 7 0.44

2,429 6 0.25%

2,583 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,533 2 0.0800% 0.42

0.32%

0.62

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The area’s largest concern may be low startup activity rates. Because of the small scale of the District, measurements among some individual 

industries may not be meaningful. However, bright spots can be discerned in metalworking (industrial machinery, electronics and transport 

equipment), but is scattered among other industries. Notably, these industries also performed well in the retention vitality indices. However, 

both communications and the technology-driven business services industry rated poorly for startup activity. Health, legal and engineering 

services all rated highly.

Among surviving startups, vitality rates were generally low, especially in sales vitality and sales per employee indices. The low number of 

identified retained startups severely constrained industry-specific analysis. However, agricultural services and construction stood out for high 

sales per employee rates, while job and sales measures were very positive in metalworking industries.

High growth concentrations lag significantly in the District. The aggregate index of 0.72 is near the top of the District ladder, which descends 

to below half of the national level of high growth firms in larger employment classifications. This vitality measurement offers little opportunity 

to compensate for the area’s low levels of entrepreneurial activity.

Aggregate : All Classes 2,583 38 1.47% 0.72
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11E

2001 firms analyzed: 23,337

Retention:

17,884 9,465

9,403 53% 1.04

607,388 795,530 31.0% 0.61

14 20 43% 1.03

231,796 182,833 79% 1.02

86,770 79,553 -8% 0.77

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.04 0.94

Retained Firms

US = 1.00

ARC District 11E is administered by the Southeast Tennessee Development District, including Bledsoe, Bradley, Grundy, Hamilton, McMinn, 

Marion, Meigs, Polk, Rhea and Sequatchie Counties. Hamilton and Marion Counties are also included in the Chattanooga MSA.

While linked to the MSA and despite overlap in some measures, the District reflects a distinct set of strengths and concerns. Retention rates 

are high overall. In the startup survival category, retention rates which would be adequate in a high growth area are borderline in the District, 

where the startup activity index is below national levels and eighteen index points behind the MSA’s. Viewed from a more favorable vantage 

point, District startup activity still outpaces the Appalachian index by seven points. Despite lower startup rates in the District, other vitality 

measures and the dynamism of retained startups seem to compensate. Concentrations of high growth firms match Appalachia’s, despite 

slightly lower scores in the MSA. Overall, the vitality picture is much more positive than in most Appalachian Districts.

While weak in both sales vitality indices and the corresponding sales per employee index, the District’s retention performance is underpinned 

by strong survival and job vitality ratings. Business out-migration is 0.3 percent of firms from the original pool and 0.7 percent of survivors – 

not a real concern for an area closely linked to a sizable MSA. While the number of migrant firms is the same in both calculations, the pool of 

firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Sales per employee positioning is particularly strong in building construction, plastics, leather, motor freight, communications, health and 

educational services. A number of value added industries turn in consistently high vitality job and sales vitality scores, including agricultural 

services, building construction (a good development indicator here coupled with high building material supply scores), paper products, leather, 

fabricated metals, instruments, personal services and engineering-research.

0.77 0.90

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Tennessee 11E

2001 firms analyzed: 23,337

Startups:

2,801

18.3%

0.94

558 242

237 43% 0.91

770,000 1,643,902 113.5% 0.93

13 24 85% 1.27

7,055 5,668 80% 0.97

96,250 126,454 31% 0.92

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

10,746 238 2.21% 0.96

13,588 83 0.84

15,434 59 0.38%

16,583 10 0.0600% 1.08

'96 Firms in Class High Growth 96-01 % High Growth US Index

16,195 28 0.1700% 0.91

0.61%

0.96

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although slightly below national levels, the District’s 0.94 startup index is welcome in the Appalachian context, including agricultural services, 

several construction segments, leather and engineering-research, all of which scored well in retention vitality ratings. Other startup activity 

leaders included wood products, printing, chemicals, leather, stone-clay-glass, industrial machinery and transport equipment.

While startup retention dipped below national rates, this was somewhat balanced by the District’s relatively good levels of startup activity. As 

importantly, surviving startups evidenced high levels of vitality, ranking within 7 percent of the national level in all retained startup vitality 

ratings and leading US levels in job vitality. Sales per employee rates among retained startups was only 8 percent below national levels –a full 

17 index points above the Appalachian average. The sales per employee level was supported by especially good showings in agricultural 

services, construction, apparel, durable wholesale, personal and business services (including computer services).

Among startup survivors, consistently high vitality ratings were identified in construction segments, textiles, chemicals, fabricated metals, 

industrial machinery, legal and engineering-research.

Concentrations of high growth firms are 90 percent of the national level, matching the Appalachian rate and scoring seven points above the 

Chattanooga MSA. Concentrations are close to US scores in every employment class except Class II (began with fewer than ten jobs and 

grew to more than twenty-five), and lead US averages in the largest segment, Class V. The strong concentration of growth firms, coupled 

with solid startup activity and leading retention scores, make for a District whose vitality outlook exceeds most in the Region.

Aggregate : All Classes 16,583 303 1.83% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12A

2001 firms analyzed: 2,671

Retention:

2,111 1,067

1,056 50% 0.99

427,621 597,586 39.7% 0.78

9 13 44% 1.07

18,682 13,818 74% 0.96

71,270 85,369 20% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.99 0.78

Retained Firms

US = 1.00

ARC District 12A is administered by the LENOWISCO Planning District Commission, including Lee, Scott and Wise Counties. Scott County 

is also included in the Johnson City MSA.

This small District exhibits the common pattern of vitality scores of many modest-growth ARC areas, including high retention rates coupled 

with low startup rates and weak concentrations of high growth firms. Overall retention rates are lower than are usually found in Districts fitting 

this pattern. While high growth concentrations and retained firm sales vitality are weaker than in the linked Johnson City MSA, job vitality 

among average retained firms is considerably better.

Retention stands almost even with national trends, while sales vitality among retained firms lags by 22 percent. Job vitality among the same 

group hovers around national levels. Weak sales vitality has reduced the District’s survivor sales per employee indicator to 82 percent of the 

national level – just slightly ahead of the MSA but twelve index points behind the Appalachian average. At 0.5 percent of the original pool of 

firms tracked from 1996 and 1.0 percent of survivors, business out-migration is somewhat high for a rural area, although far from the most 

serious concern. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the 

number of area firms that ceased operations in the interim.

Retained firm sales per employee rates are above national levels in only a handful of industries, including agricultural services, chemicals, 

electronics, wholesale durables and personal services. Industries indicating other consistently high vitality scores include non-metallic mining, 

several construction segments, electronics, wholesale durables, health, legal and social services. Several retail segments, including 

restaurants and general merchandise (department) stores also evidence high vitality ratings.

0.82 0.55

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12A

2001 firms analyzed: 2,671

Startups:

266

15.1%

0.78

54 28

28 52% 1.11

309,375 308,000 -0.4% 0.00

5 6 20% 0.30

263 172 65% 0.79

44,196 51,333 16% 0.37

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,256 19 1.51% 0.66

1,650 11 0.92

1,845 2 0.11%

1,976 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,938 0 0.0000% 0.00

0.67%

0.27

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity lags 22 percent below national averages and nine index points below the Region. The number of startups is too small to take a 

significant measure in many industries. However, leading levels of startup activity were found in coal mining, heavy construction, wholesale 

non-durables, personal services and several professional service categories, all likely evidencing demand from underserved rural areas. 

These included health, legal, educational and social services.

While the retention of 1996 startups was quite high (1.11) this is not unusual in low growth, low competition areas. Moreover, the vitality 

measures among surviving startups were quite low, as was their overall sales per employee positioning. The very small number of identified 

surviving startups severely constrained industry-specific analysis. Among these, the mixed ratings for personal and legal services seemed to 

be the best of the lot.

Concentrations of high growth firms register fully 45 percent below the national average, although the District index climbed as high as 0,92 

in the Class II ratings (began with fewer than ten jobs ended with more than twenty-five). Nonetheless, weak high vitality coupled with low 

startup activity and very weak vitality among retained startups suggest a District in need of a larger and more sustained level of economic 

dynamism than can be spun off from the Johnson City MSA.

Aggregate : All Classes 1,976 22 1.11% 0.55
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12B

2001 firms analyzed: 3,240

Retention:

2,541 1,281

1,273 50% 0.99

1,089,847 739,625 -32.1% 0.00

11 16 45% 1.09

27,573 20,188 73% 0.95

83,834 61,635 -27% 0.59

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.99 0.61

Retained Firms

US = 1.00

ARC District 12B is administered by the Cumberland Plateau Planning District Commission, including Buchanan, Dickenson, Russell and 

Tazewell Counties. None is included in any MSA jurisdictions.

This small District exhibits the common pattern of vitality scores for many modest-growth ARC areas, including solid retention rates coupled 

with low startup rates and weak concentrations of high growth firms. Overall retention rates are lower than usual in this pattern – just at the 

US average, rather than substantially above it. While high growth concentrations and retained firm sales vitality are weak, job vitality among 

average retained firms is considerably better.

With low startup rates and low concentrations of high growth firms, higher retention rates and retained firm vitality are necessary to sustain 

area dynamism, but the District’s strengths do not seem to rise to the task at present. Job vitality hovers around national levels, but levels of 

sales vitality among retained firms are quite low. The District is not linked to any MSA, much less one which can spin off enough economic 

vitality for an outlying District to grasp. At 0.3 percent of firms from the original 1996 pool and 0.6 percent of survivors, business out-migration 

is not a correspondingly large problem. While the number of migrant firms is the same in both calculations, the pool of firms to which it is 

compared differs by the number of area firms that ceased operations in the interim.

Among retained firms, only personal services, health services and amusements indicate leading sales per employee rates. There is a 

correspondingly low level of industries which indicate both high sales and job vitality among survivors: only lodging and business services 

qualify in both categories. Not a single manufacturing industry or other value-added segment rates highly across both sales and job measures.

0.59 0.75

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12B

2001 firms analyzed: 3,240

Startups:

268

11.9%

0.61

66 31

31 47% 1.00

1,873,684 520,690 -72.2% 0.00

8 9 13% 0.19

494 267 54% 0.65

187,368 74,384 -60% 0.54

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,478 30 2.03% 0.88

1,947 13 0.92

2,210 11 0.50%

2,373 3 0.1300% 2.26

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,323 4 0.1700% 0.91

0.67%

1.26

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Lagging national rates by 39 percent and the Region by twenty-six index points, startup activity is the District’s weakest vitality link. Startup 

rates approach or lead national averages in extraction industries, wood products and furniture, fabricated metals, motor freight and social 

services. Despite high retained firm vitality ratings, business services startup levels are poor. 

Likewise, vitality indices among the few identified surviving startups are weak (the sample analyzed is comprised of only 31 firms). Surviving 

startups trail US indices in every vitality measure. Sales per employee positioning is a little more than half the national score, and higher than 

average only in motor freight transport. The very small number of retained startups in motor freight, textiles and retail foods indicate 

consistently high industry vitality measures.

Aggregate concentrations of high growth firms are three-quarters of the US average, although employment class indices range considerably 

higher, buoyed by the small number of firms needed in a jurisdiction of limited scale. Aggregate figures can be lower than any of the 

employment class breakouts due to overlap of some firms which qualify as high growth in multiple classes.

Aggregate : All Classes 2,373 36 1.52% 0.75
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12C

2001 firms analyzed: 6,013

Retention:

4,890 2,761

2,735 56% 1.11

383,355 560,320 46.2% 0.91

11 13 18% 0.44

51,869 36,136 70% 0.90

63,893 70,040 10% 0.67

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.11 0.55

Retained Firms

US = 1.00

ARC District 12C is administered by the Mount Rogers Planning District Commission, including Bland, Carroll, Grayson, Smyth, Washington 

and Wythe Counties. Washington County is also included in the Johnson City MSA.

This District exhibits the common pattern of vitality scores for many modest-growth ARC areas, including high retention rates coupled with 

very low startup rates and extremely weak concentrations of high growth firms. Startup activity and high growth concentrations are weaker 

than in the linked Johnson City MSA, but vitality measures of retained firms are about on par with the MSA. High vitality ratings among 

startup survivors are insufficient compensation for broader weaknesses.

Despite a leading retention rate, retained firm vitality is low in current sales per employee positioning. However, the District demonstrates 

relatively strong performance in the sales vitality index. Job vitality ratings are mixed. Business out-migration is 0.55 of firms from the original 

1996 pool, and 0.9 percent of survivors, somewhat higher than in most similarly configured Districts. While the number of migrant firms is the 

same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Among the area’s significant industries, non-metallic mining, textiles, furniture and plastics were the value-added industries indicating high 

sales per employee positioning. Higher vitality ratings include a number of industries which indicate leading indices in both sales and job 

categories. These include agricultural services, wood products, paper products, plastics, stone-clay-glass, fabricated metals, industrial 

machinery, engineering and at least three retail segments. Most services, including business services as well as communications, are weak.

0.67 0.49

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12C

2001 firms analyzed: 6,013

Startups:

431

10.6%

0.55

140 73

71 51% 1.08

537,778 3,564,179 562.8% 4.62

21 39 86% 1.29

2,897 2,774 96% 1.15

89,630 86,931 -3% 0.63

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,482 38 1.09% 0.47

4,392 13 0.41

4,840 6 0.12%

5,119 2 0.0400% 0.70

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,022 4 0.0800% 0.42

0.30%

0.31

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates 45 percent below the US average, and thirty-two index points below Appalachia. Startup activity is below national levels 

in all significant industries except wood products and furniture, stone-clay-glass, primary and fabricated metals, and transport services. 

Indices for heavy construction, food products and the lodging industry are within 10 percent of national rates.

Although overall sales per employee rates among surviving startups remain low, this group appears to have developed good retention rates 

and leading vitality indicators in both sales and job categories. The small number of retained startups tracked from 1996 makes industryspecific comparison difficult, but startup survivors in fabricated metals, motor freight transport and non-durable wholesale stand out for high 

indices across both sales and job vitality categories.

The District’s high growth index lags national and Appalachian patterns by a significant margin. Aggregate concentrations of growth firms 

are only 49 percent of the US average and rates dip as low as 0.31 in Class III (beginning with fewer than twenty-five jobs and ending with 

more than fifty). The combined lag in high growth concentrations and entrepreneurial dynamism suggest needed areas for additional, 

focused stimulation and technical assistance.

Aggregate : All Classes 5,119 51 1.00% 0.49
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12D

2001 firms analyzed: 5,025

Retention:

3,851 2,134

2,121 55% 1.09

394,220 882,185 123.8% 2.44

16 21 31% 0.75

57,195 43,720 76% 0.99

65,703 110,273 68% 1.06

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.77

Retained Firms

US = 1.00

ARC District 12D is administered by the New River Valley Planning District Commission, including Floyd, Giles, Montgomery and Pulaski 

Counties. None is included in any MSA jurisdictions.

This District presents an interesting combination of vitality ratings. Although common patterns for low-growth areas are indicated by the high 

retention and startup retention rates coupled with low startup activity, the performance of retained industries is impressive and 

complemented by indices suggesting solid concentrations of high growth firms. The combination of measures may suggest an area which is 

compensating, at least in significant part, for its lack of new entrepreneurial energy.

The overall retention rate is 9 percent above national levels. More importantly, aggregate rates among retained firms are quite high in sales 

vitality and current survivor sales per employee categories, in part due to large increases among some manufacturing industries. Job vitality 

ratings are solid when viewed in tandem, creating a rather positive vitality picture for the mature business community. 

Retained firm sales per employee rates lead national levels in wood products, paper products and transport equipment – and are close to US 

rates in electronics. Major retail segments, investment firms, amusement and health services also indicate high retained firm sales per 

employee levels. Value added industries with high vitality ratings in both sales and job categories include agricultural services, wood products, 

furniture, stone-clay-glass, electronics, transport equipment, insurance and engineering-research. A number of retail segments also qualify as 

consistent vitality leaders. 

Business out-migration stands at 0.3 percent of firms tracked from the 1996 pool, and 0.6 percent of survivors, not a cause for undue 

concern. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared diffes by the number of 

area firms that ceased operations in the interim.

1.06 0.97

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12D

2001 firms analyzed: 5,025

Startups:

481

14.9%

0.77

82 47

47 57% 1.22

398,387 421,739 5.9% 0.05

5 6 20% 0.30

447 299 67% 0.80

66,398 70,290 6% 0.51

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,363 61 2.58% 1.12

2,984 17 0.79

3,345 12 0.36%

3,569 3 0.0800% 1.50

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,491 5 0.1400% 0.75

0.57%

0.91

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Entrepreneurial activity is by far the weakest link in the District’s vitality picture, covering both low activity levels and weak vitality performance.

Startup activity rates lag 23 percent below national averages and ten index points behind the Region. In this overall context, startup activity 

leads national rates in agricultural services, furniture, chemicals, fabricated metals, electronics, and instruments; agricultural services, 

furniture and electronics also had high retained firm vitality ratings. Transport services, several retail segments and the financial sector also 

showed leading startup activity levels, as did personal services and amusements.

Vitality ratings among the small pool of retained startups were poor; levels were only a small fraction of US rates in sales vitality, job change 

and current levels of survivor sales per employee. Only retained engineering startups demonstrated higher than average sales per employee. 

And while the value of industry-specific analysis is severely limited by the small numbers involved, startup survivors in fabricated metals, 

banks and engineering, along with some retail operations, appeared to develop high ratings in both sales and job vitality indices.

In concert with the area’s very solid retention vitality ratings, concentrations of high growth firms appear to underpin local dynamism. The 

District’s aggregate rating is just about at national levels, seven index points higher than the Appalachian score. The heaviest significant 

concentration is among the small Class I firms, those which began the measurement period with fewer than five jobs and ended with more 

than ten. The District’s Class III index is also only 9 percent lower than the national average, although other classes fall below both US and 

Appalachian levels.

Aggregate : All Classes 3,569 70 1.96% 0.97
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12E

2001 firms analyzed: 2,538

Retention:

1,989 1,067

1,033 52% 1.03

443,420 538,131 21.4% 0.42

12 15 25% 0.60

22,818 15,814 69% 0.90

73,903 76,876 4% 0.74

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 0.67

Retained Firms

US = 1.00

ARC District 12E is administered by the Fifth Planning District Commission, including Alleghany, Botetourt and Craig Counties. Botetourt 

County is also included in the Roanoke MSA.

This is a very small District, making analysis quite difficult at more than aggregate levels. Attempts to discuss specific industry performance 

should be understood in that context. Aggregate indices suggest very modest vitality patterns, including the common thread of solid-to-high 

retention rates (overall and startups) coupled with low entrepreneurial vitality levels and weak concentrations of high growth firms.

The overall retention rate is 3 percent above US averages, but indices lag significantly below national and Appalachian averages in both job 

and sales vitality categories. Job replenishment rates are only 10 percent below average, but the current survivor sales per employee 

indicator is less than three-quarters of the US rate and twenty index points below Appalachia’s. Business out-migration is a concerning 1.7 

percent of all firms from the 1996 pool tracked, and 3.2 percent of survivors. This is an unusually high rate for a District with this rural 

configuration. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the 

number of area firms that ceased operations in the interim.

Retained firm sales per employee ratings are higher in a few traditional industries and some newer ones, including agricultural services, 

apparel, wood products, plastics, instruments, motor freight, communications and personal services. Several of these same industries are 

included in the list of those showing high scores in both sales and job vitality indices: agricultural services, lumber, furniture, instruments, 

motor freight transport, communications, non-durable wholesale, amusements and social services.

0.74 0.37

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12E

2001 firms analyzed: 2,538

Startups:

215

13.0%

0.67

42 20

19 45% 0.97

2,277,273 300,000 -86.8% 0.00

10 7 -30% 0.00

394 133 34% 0.41

151,818 75,000 -51% 0.54

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,268 9 0.71% 0.31

1,588 3 0.26

1,758 1 0.06%

1,864 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,827 1 0.0500% 0.29

0.19%

0.14

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The District’s startup rate is fully one-third below the national index. Rates are at or above national levels in only a handful of industries, 

including crops and livestock, wood products, fabricated metals, business services and some retail segments. The size of most of these 

industries is too small to conclude much from the specific analysis, but the number of business services startups appears significant.

Only a small group of retained startups could be tracked from the 1996 group. These scored very low in all aggregate vitality and sales per 

employee indicators. Among them, surviving startups in the restaurant, real estate and amusement groups suggested leading sales per 

employee levels, but none displayed high scores in both sales and job vitality indices.

Concentrations of high growth firms are extremely low in aggregate and for all employment class breakdowns Short of an infusion of 

business recruitment success, the double whammy of limited dynamic engines and weak entrepreneurial vitality requires address if the 

District is to move forward .

Aggregate : All Classes 1,864 14 0.75% 0.37
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12F

2001 firms analyzed: 1,828

Retention:

1,162 743

735 63% 1.26

359,775 507,931 41.2% 0.81

13 19 46% 1.11

13,983 13,740 98% 1.28

51,396 63,491 24% 0.61

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.26 0.72

Retained Firms

US = 1.00

ARC District 12F is administered by the Central Shenandoah Planning District Commission, including Bath, Highland and Rockbridge 

Counties. None is included in any MSA jurisdictions.

This is a very small District, making analysis quite difficult at more than aggregate levels. Attempts to discuss specific industry performance 

should be understood in that context. Aggregate indices suggest low sales-related patterns with much better job vitality performance. The 

area picture, including the common thread of very high retention rates (overall and startups) coupled with low entrepreneurial vitality levels 

and weak concentrations of high growth firms, suggest patterns common to a number of modest vitality ARC areas in need of sources of 

new dynamism.

The area’s high overall retention rate (26 percent above US averages) is complemented by leading aggregate job vitality indicators. However, 

lagging sales vitality and very low survivor sales per employee indicators suggest that the high retention rates are more indicative of common 

low growth patterns than anything else. Business out-migration is 0.7 percent of firms from the 1996 pool of firms tracked, and 1.1 percent of 

survivors, a relatively high rate for an area with this rural configuration. While the number of migrant firms is the same in both calculations, the 

pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Among value added industries and services, only wood products and engineering exhibit leading sales per employee indicators among 

retained firms. A somewhat more diverse group shows leading indicators in both sales and job vitality indices (without regard to current sales 

per employee standing), including building construction, wood products, industrial machinery, motor freight, real estate and an interesting set 

of services and retail segments, including personal services, health services and amusements. Engineering measures are also high.

0.61 0.28

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC Virginia 12F

2001 firms analyzed: 1,828

Startups:

171

13.9%

0.72

31 22

22 71% 1.52

386,957 438,095 13.2% 0.11

16 28 75% 1.13

471 620 132% 1.58

48,370 54,762 13% 0.40

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

747 3 0.40% 0.17

913 2 0.30

1,007 4 0.40%

1,068 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,047 0 0.0000% 0.00

0.22%

1.00

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are 28 percent below the national average and lag Appalachian levels by fifteen index points. However, startup rates are 

higher in a number of value added industries which – if the low numbers measured can be considered significant -- hold out some

encouragement for future dynamism. These include agricultural services, building and heavy construction, food products, furniture, printing, 

fabricated metals, industrial machinery and electronics. 

As is the case for retained firms overall, job vitality among retained startups looks solid, but sales vitality and sales per employee levels are 

quite low. Not a single value added industry shows retained startups with a leading sales per employee rating. Among surviving startups, only 

restaurants indicate high indices in both sales and job vitality categories, an interesting corollary to the high personal services startup activity 

rate in this low vitality area.

Concentrations of high growth firms are extremely low, 28 percent of the US level in aggregate and sixty-two index points lower than 

Appalachia as a whole. The scale of the District and the number of high growth firms identified for this index make the various employment 

class breakdowns somewhat less than useful as measures.

Aggregate : All Classes 1,068 6 0.56% 0.28
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13A

2001 firms analyzed: 6,509

Retention:

5,408 3,042

3,004 56% 1.10

502,815 626,991 24.7% 0.49

11 14 27% 0.65

56,362 42,723 76% 0.98

62,852 69,666 11% 0.67

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.76

Retained Firms

US = 1.00

ARC District 13A is administered by the Region 1 Planning and Development Council, including McDowell, Mercer, Monroe, Raleigh,

Summers and Wyoming Counties. None is included in any MSA.

This small District reflects common patterns of low vitality areas, including higher than average overall retention and solid startup retention, 

both coupled with low levels of entrepreneurial activity, low retained firm sales per employee positioning and weak concentrations of high 

growth firms.

Although overall retention levels are 10 percent above the national average, the survival rate is not matched by vitality indices of retained 

firms. While job replenishment rates are almost at national levels, sales vitality is only half of the US rate and job vitality only 65 percent of the 

average. Sales per employee among retained firms lags national levels by one-third. Business out-migration levels are 0.7 percent of firms 

from the original 1996 pool tracked, and 1.2 percent of survivors – a troublesome indicator for a rural area. While the number of migrant firms 

is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the 

interim.

Retained firm sales per employee levels rise above national levels in only a handful of value added industries, including electronics and health 

services. A larger number of industries post leading scores in both job and sales vitality measures, including coal mining, food and wood 

products, the small plastics and instruments groups, stone-clay-glass, industrial machinery and communications. Wholesale durables and 

several retail segments also score well.

0.67 0.80

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13A

2001 firms analyzed: 6,509

Startups:

647

14.8%

0.76

160 76

74 46% 0.99

1,546,000 1,213,636 -21.5% 0.00

16 26 63% 0.94

2,275 1,919 84% 1.01

77,300 101,136 31% 0.73

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,127 66 2.11% 0.92

4,077 22 0.75

4,696 15 0.32%

5,047 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,937 8 0.1600% 0.85

0.54%

0.81

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity trails US levels by 24 percent and Appalachia by eleven index points. Startup activity is strong in extraction industries, near 

national levels in wood products and higher than average in stone-clay-glass and industrial machinery.

The relatively small number of surviving startups constrains industry-specific assessment of retained startup vitality. However, while 

aggregate retention rates are at national levels, sales vitality is extremely low, producing (along with higher job vitality ratings) a retained 

startup sales per employee rate more than one-quarter below the national average. Startup sales per employee indices are higher in coal 

mining, wholesale durables, personal, business and social services, but not among any manufacturing industries. Retained special trades 

construction, wholesale durables, restaurant and lodging startups showed leading indices in both sales and job vitality. However, no 

manufacturing industries or value added services performed as well.

Aggregate concentrations of high growth firms were 20 percent below national levels and ten index points below the Appalachian score. 

District concentrations climbed to 92 percent of average for the Class I employment class (began with fewer than five jobs and ended with 

more than ten), but then dipped to 75 percent of average in Class II (firms beginning with fewer than ten jobs and ending with more than 25). 

The lackluster level of high growth firms seems insufficient to compensate for the area’s low rate of entrepreneurial vitality as an engine of 

new economic dynamism.

Aggregate : All Classes 5,047 82 1.62% 0.80
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13B

2001 firms analyzed: 7,313

Retention:

6,584 3,571

3,530 54% 1.06

533,846 926,640 73.6% 1.45

13 18 31% 0.74

78,564 61,599 78% 1.02

76,264 92,664 22% 0.89

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.75

Retained Firms

US = 1.00

ARC District 13B is administered by the Region 2 Planning and Development Council, including Cabell, Lincoln, Logan, Mason, Mingo and 

Wayne Counties. Cabell and Wayne are also included in the Huntington MSA.

While evidencing most signs of the sluggish pattern of high retention and low vitality indices, the District performs somewhat better than the 

pattern anticipates in aggregate retention vitality indices, and generally outpaces Appalachian patterns, At the same time, the startup activity 

rate is twelve index points behind the Region’s, and concentrations of high growth firms lag the Region by six points and the US by sixteen. 

Summary scores also trail those in the linked Huntington MSA, where startup rates are still low, but high growth concentrations rise to about 

the national level.

Overall retention rates are 6 percent above the national norm. Encouragingly for an area with low concentrations of growth firms and even 

lower startup activity, aggregate retention vitality indices are generally positive, with leading scores in sales vitality and job replenishment, and 

a current survivor sales per employee rating of 0.89, only slightly below the Appalachian average. District sales and replenishment ratings are 

supported by correspondingly high levels in the MSA, Business out-migration levels are 0.6 percent of firms from the 1996 pool of firms 

tracked, and 1.1 percent of survivors, a somewhat disturbing, but not dominant, note. While the number of migrant firms is the same in both 

calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Sales per employee positioning is buttressed by high ratings in coal mining and other extraction industries, food products, furniture, primary 

metals and health services. Several retail segments register high indices as well. A wide variety of industries show high ratings in both sales 

and job vitality indices, accounting for the District’s solid aggregate scoring. These include non-metallic mining; food products, apparel, 

furniture, stone-clay-glass, primary metals, industrial machinery, electronics, transport equipment and instruments among manufacturers; 

health and social services. Again, several retail industries outperform national averages in multiple vitality ratings.

0.89 0.84

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13B

2001 firms analyzed: 7,313

Startups:

709

14.6%

0.75

196 94

87 44% 0.95

530,303 580,263 9.4% 0.08

7 11 57% 0.86

1,214 882 73% 0.87

88,384 58,026 -34% 0.42

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,757 93 2.48% 1.08

4,893 32 0.90

5,638 10 0.18%

6,101 4 0.0700% 1.17

'96 Firms in Class High Growth 96-01 % High Growth US Index

5,959 8 0.1300% 0.71

0.65%

0.45

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity lags the US by a full one-quarter and Appalachian levels by twelve index points. However, relative activity rates are strong in 

mining, construction, food products, apparel, wood products and several metalworking industries, as well as educational services.

Startup retention is weaker than would be anticipated in an area with low levels of entrepreneurial activity. In addition, aggregate vitality 

indices among retained startups are quite low, especially sales vitality and sales per employee indicators. No value-added industries (except 

legal, if included as a value-added service) reflect high sales per employee indices. And although the value of industry-specific analysis is 

limited by the small number of firms analyzed, only a handful of retained startups appear to reflect high indices in both sales and job vitality 

categories, including apparel, fabricated metals, health and legal services, as well as two retail segments.

Aggregate concentrations of high growth firms are 16 percent lower than national levels, thirteen index points behind the MSA and six below 

the Regional score. Concentrations in the smallest employment class are actually higher than US norms, but drop thereafter. Higher 

concentrations in the MSA suggest possible opportunities to work with growth firms there toward eventual branch facility development inside 

the District.

Aggregate : All Classes 6,101 104 1.70% 0.84
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13C

2001 firms analyzed: 10,366

Retention:

9,291 4,856

4,800 52% 1.03

550,662 1,015,697 84.5% 1.67

14 17 21% 0.51

121,424 83,191 69% 0.89

78,666 112,855 44% 1.09

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 0.85

Retained Firms

US = 1.00

ARC District 13C is administered by the B-C-K-P regional Intergovernmental Council, including Boone, Clay, Kanawha and Putnam 

Counties. Kanawha and Putnam are also comprise the entire the Charleston MSA.

The District is dominated by the MSA, whose counties host over 95 percent of the District’s business establishments. The area’s summary 

vitality ratings are generally on a par with Appalachian levels, although concentrations of high growth firms are notably higher and virtually 

even with US levels.

The overall retention index is 3 percent above US averages. Although job vitality levels trails US and Appalachian indices, sales vitality and 

retained firm sales per employee rates are higher. The sales per employee rating appears to be heavily influenced by extraction industries.

Sales per employee levels among retained firms are also lead in several construction segments, food products, textiles, wood products and 

furniture, stone-clay-glass, fabricated metals, non-durable wholesale, health and legal services. A wide range of industries score well in both 

sales and job vitality measures among retained firms: agricultural services, building construction textiles, industrial machinery, electronics, air 

transport, business services, and legal. An array of consumer industries -- retail segments, amusements and personal services, all indicate 

high rates in both sales and job vitality.

Business out-migration rates are 0.6 percent from the pool of firms tracked from 1996, and 1.2 percent among survivors, slightly high for an 

MSA dominated district. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by 

the number of area firms that ceased operations in the interim.

1.09 0.99

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13C

2001 firms analyzed: 10,366

Startups:

1,072

16.5%

0.85

276 131

128 46% 0.99

923,077 2,633,058 185.2% 1.52

10 27 170% 2.55

2,556 3,449 135% 1.62

76,923 101,271 32% 0.74

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,405 129 2.39% 1.04

6,997 59 1.16

7,986 39 0.49%

8,590 4 0.0500% 0.83

'96 Firms in Class High Growth 96-01 % High Growth US Index

8,411 19 0.2300% 1.19

0.84%

1.23

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

At 85 percent of the national rate, startup activity levels are about even with Appalachia as a whole (0.87). Activity rates lead US patterns in 

coal mining, most construction segments, the needle trades, wood products, chemicals, fabricated metals, industrial machinery and 

instruments. Communications startup rates are 3 percent above the national average. Retail and financial services segments follow suit. 

Although overall entrepreneurial activity lags, the combination of value added and consumer industries in which it is strong complement the 

District’s notable levels of retention vitality.

Startup retention is virtually even with national norms, and aggregate scores are high across sales and job vitality indices. Only retained 

startup sales per employee rates are low and, at three-quarters of the national average, about even with Regional levels.

Strong sales per employee levels among retained starts are evident in coal mining, motor freight, transport services and amusements. (Sales 

data was difficult to develop for retained manufacturing startups in this District). With the addition of business services, the same industries 

tended to reflect consistently high vitality ratings.

Aggregate concentrations of high growth firms rated even with national levels and surpassed Appalachian scores by nine index points. 

District rates lead US scores in all employment classes with the exception of the largest, Class V. In all, high growth concentrations make a 

worthy complement to the District picture of retention vitality and entrepreneurship, which is buttressed by impressive performance among 

retained startup firms.

Aggregate : All Classes 8,590 173 2.01% 0.99
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13D

2001 firms analyzed: 4,249

Retention:

3,304 1,873

1,858 56% 1.12

454,714 743,494 63.5% 1.25

10 13 40% 0.96

30,213 25,110 83% 1.08

64,959 74,349 15% 0.72

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.70

Retained Firms

US = 1.00

ARC District 13D is administered by the Region 4 Planning and Development Council, including Fayette, Greenbrier, Nicholas, Pocahontas 

and Webster Counties. None is also included in any MSA.

This small District exhibits a common pattern of modest vitality areas, including high retention rates coupled with low startup activity and 

lagging concentrations of high growth firms. High growth concentrations are, however, not far below the Appalachian average. The District’s 

sales per employee indicator for retained firms is considerably weaker.

District retention rates are 12 percent above the national average, and supported by a leading sales vitality index among retained firms, as 

well as solid job vitality ratings. However, these vitality measures are within the context of a lagging indicator for overall sales per employee 

positioning, 28 percent below national levels and twenty-two index points behind the Appalachian score. Business out-migration rates are 0.5 

percent of firms from the original 1996 pool, and 0.8 percent of survivors, both slightly high for a rural area, but not a major issue. While the 

number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that 

ceased operations in the interim.

Retained firm sales per employee ratings are weak across the board, leading in only miscellaneous manufacturing, personal services, 

amusements and retail building supplies. Underpinning aggregate indices, a larger number of industries demonstrate high scores in both 

sales and job vitality measures: agricultural services, wood products, printing, stone-clay-glass, industrial machinery, electronics, personal 

and educational services and engineering. Several retail segments also qualify.

0.72 0.87

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13D

2001 firms analyzed: 4,249

Startups:

403

13.7%

0.70

98 47

44 45% 0.96

661,818 883,333 33.5% 0.27

8 11 38% 0.56

674 492 73% 0.88

110,303 80,303 -27% 0.58

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,985 41 2.07% 0.90

2,514 19 1.04

2,840 7 0.25%

3,058 1 0.0300% 0.58

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,993 5 0.1700% 0.88

0.76%

0.62

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Aggregate startup activity rates lag national levels by 30 percent, placing the District seventeen points behind the Appalachian index. Among 

industries with significant numbers of establishments, startup rates lead national patterns in only a few, including agricultural services, 

printing, miscellaneous manufacturing, restaurants and miscellaneous retail, security brokers, real estate and legal services.

The very limited number of retained startups tracked from 1996 constrains industry-specific vitality analysis. However, aggregate rates are 

poor in every vitality category, compounding the gap in new growth dynamics created by low startup activity rates. Retained startups seem 

well positioned by the sales per employee indicator only in heavy construction, personal services and a few retail segments. And only retained 

startups in wood products and lodging demonstrate leading indices in both sales and job vitality measures; primary metals does almost as 

well. But again, these include very small industry samples.

The District’s concentration of high growth firms is more in line with its solid retention vitality performance. Aggregate scores are almost at 

Appalachian levels, and the two smaller employment classes analyzed (began with fewer than five job and grew to more than ten; and 

began with fewer than ten and grew to twenty five or more) show Districts ranges of 90 percent-108 percent of US levels, and 88 percent of 

the US rate in Class IV’s rather small sample (started with fewer than 50 jobs, grew to more than 100). While the showing here and, more 

importantly, the overall advances in retained firm vitality, help mitigate low startup activity and vitality scores, that gap requires address.

Aggregate : All Classes 3,058 54 1.77% 0.87
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13E

2001 firms analyzed: 5,265

Retention:

4,438 2,486

2,462 56% 1.10

508,093 748,800 47.4% 0.93

13 17 31% 0.74

56,738 41,660 73% 0.95

63,512 83,200 31% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.75

Retained Firms

US = 1.00

ARC District 13E is administered by the Region 5 Mid-Ohio Valley Regional Council, including Calhoun, Jackson, Pleasants, Ritchie, Roane, 

Tyler, Wirt and Wood Counties. Wood County is contiguous with the West Virginia segment of the Parkersburg MSA, and accounts for about 

60 percent of the business establishments in the District.

The pattern of summary scores in the District corresponds to those in the MSA. However, in every category reflecting a difference, the MSA 

leads. The two areas match overall retention rates (10 percent above average), but while the MSA rates at national levels for startup survival, 

the District lags by 11 percent. The District startup activity rate is three-quarters of the national level, and trails the MSA by six index points. 

Likewise, the MSA concentrations of high growth firms (91 percent of the national average) outpace the District by eleven index points. At 80 

percent below the national level, the sales per employee indicator for retained firms is even between the two. In general, while Wood County 

displays some performance gaps, each appears more serious in the non-MSA counties of the District.

The District’s high aggregate retention index (1.10) is complemented by solid scores among retained firms in both sales and job vitality 

measures. However, this impressive recent performance (still under US or Appalachian levels) nevertheless leaves the District with a 

struggling sales per employee position. Business out-migration is 0.5 percent of firms from the 1996 pool, and 1.0 percent of survivors, a 

reasonable rate which should not be cause for alarm. While the number of migrant firms is the same in both calculations, the pool of firms to 

which it is compared differs by the number of area firms that ceased operations in the interim.

Only a handful of value-added industries demonstrate leading sales per employee positioning, including heavy construction, stone-clay-glass, 

air transport, health and educational services. Personal services and some retail segments also do well in this measure. A larger number of 

value added and consumer industries evidence top-level indices in both sales and job vitality ratings, including building construction, wood 

products, stone-clay-glass, industrial machinery, electronics, transport equipment, air transport, amusements and educational services. The 

appearance of construction industries in both lists and the strength of must metalworking industries appear to be encouraging signs.

0.80 0.80

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13E

2001 firms analyzed: 5,265

Startups:

521

14.7%

0.75

115 49

48 42% 0.89

844,304 1,847,727 118.8% 0.97

28 32 14% 0.21

3,143 1,554 49% 0.59

76,755 92,386 20% 0.67

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,599 49 1.89% 0.82

3,334 15 0.62

3,808 10 0.26%

4,150 1 0.0200% 0.43

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,031 7 0.1700% 0.91

0.45%

0.66

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Both startup activity and the vitality of retained startups appear quite a bit more limited in the District than the MSA, although both areas lag 

far behind US levels and, for the most part, well behind the Region as well. The District’s startup rate is 25 percent below the national rate, 

although leading indices are found in apparel, plastics, stone-clay-glass and every metalworking industry (including instruments). Startup 

activity rates are also relatively high in health, legal and educational services. The distribution of startup activity constrains the value of the 

analysis for some smaller industries.

Vitality rates among the handful of surviving startups tracked from 1996 are weak except in the sales vitality measure, which is 97 percent of 

the national level. This solid performance – in concert with low job vitality – was not enough to raise retained startup sales per employee 

levels above 67 percent of the national average, fifteen index points below the MSA’s rate. Startup sales per employee rates were notably 

higher in stone-clay-glass (a consistent District performer), personal services and some retail segments. Based on the very limited numbers 

of firms available for analysis, wood products and stone-clay-glass also indicated solid performance levels across both sales and job vitality 

measures.

Aggregate high growth concentrations are 80 percent of the national level, and eleven index points lower than the index developed by the 

MSA. Concentrations are lower in Classes II and III, suggesting that this measure of District economic engines is unable at present to 

compensate for the District’s lag in startup activity and vitality.

Aggregate : All Classes 4,150 67 1.61% 0.80
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13F

2001 firms analyzed: 8,769

Retention:

7,646 3,925

3,896 51% 1.01

427,644 640,014 49.7% 0.98

13 15 23% 0.55

95,424 59,956 63% 0.82

71,274 80,002 12% 0.77

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.01 0.71

Retained Firms

US = 1.00

ARC District 13F is administered by the Region 6 Planning and Development Council, including Doddridge, Harrison, Marion, Monongalia, 

Preston and Taylor Counties. None are included in any MSA.

The District demonstrates an unusual vitality pattern which includes solid but not leading levels of retention, and leading concentrations of 

growth firms coupled with low rates for both startup retention and retained startup vitality. In addition, aggregate sales per employee 

positioning is quite low. The odd combination of scores focuses the issue of whether the District’s high growth concentration is enough of an 

engine to sustain vitality in the face of lagging retention vitality overall and correspondingly modest entrepreneurial dynamism.

The aggregate District retention rate is 1 percent over the US average, somewhat low for an area with trailing entrepreneurial patterns. 

Retained firm sales vitality over the five-year period analyzed is quite good, but low sales per employee indicators suggest that the sales 

growth figure reflect catch-up, not leading, performance – still a positive, but more ambiguous, achievement. Job vitality rates are low, a factor 

which would elevate the sales per employee measure over the five-year time-series. Business out-migration is 0.4 percent of firms from the 

1996 pool, and 0.7 percent of survivors, not a cause for concern in and of itself. While the number of migrant firms is the same in both 

calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

A true handful of industries demonstrate high sales per employee positioning, including coal mining, investment firms, personal services and 

engineering, along with some retail segments. A somewhat larger number of industries performed well in both sales and job vitality measures, 

including agricultural services, non-metallic mining, heavy construction, food products, textiles, wood products, chemicals, stone-clay-glass, 

primary metals and industrial machinery. Among consumer industries, amusements and several retail segments did well. Communications 

and business services lagged.

0.77 1.10

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13F

2001 firms analyzed: 8,769

Startups:

815

13.8%

0.71

202 85

82 41% 0.87

454,918 398,667 -12.4% 0.00

6 11 83% 1.25

1,189 896 75% 0.91

56,865 56,952 0% 0.41

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,460 116 2.60% 1.13

5,735 49 1.18

6,606 36 0.54%

7,094 2 0.0300% 0.50

'96 Firms in Class High Growth 96-01 % High Growth US Index

6,928 11 0.1600% 0.84

0.85%

1.38

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity trailed US rates by 29 percent and Appalachia by sixteen index points. Startup rates were below average in all industries with 

significant numbers of establishments except heavy construction, stone-clay-glass, primary and fabricated metals, credit institutions and 

social services.

Vitality rates among startups were strong in job categories but weak in sales vitality. Sales per employee rates among the limited number of 

surviving startups were very low, and startup retention itself was only 87 percent of the national level, an unusually low rate for a low activity 

area. Although the low number of retained starts constrains the value of most industry-specific analysis, indicators in wood products, stoneclay-glass and personal services, as well as a handful of retail industries, show leading sales per employee positions. Among value added 

industries, only stone-clay-glass indicated high retained startup vitality levels in both sales and job measures.

High growth concentrations are clearly a District strong point. The aggregate high growth index leads US patterns by 10 percent and 

Appalachia by sixteen index points. The District Index climbs to 1.38 in Class III (firms which began the analysis period with fewer than 25 

jobs and grew to more than 50). This is impressive performance, even given the limited number of firms involved. Corresponding concern 

for the District is the level of dependence on this relatively small number of firms in the absence of adequate levels of new entrepreneurial 

activity or more robust overall retention vitality.

Aggregate : All Classes 7,094 158 2.23% 1.10
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13G

2001 firms analyzed: 3,615

Retention:

3,099 1,764

1,752 57% 1.12

474,746 636,249 34.0% 0.67

10 13 30% 0.72

28,326 21,817 77% 1.00

67,821 70,694 4% 0.68

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.61

Retained Firms

US = 1.00

ARC District 13G is administered by the Region 7 Planning and Development Council, including Barbour, Braxton, Gilmer, Lewis, Randolph, 

Tucker and Upshur Counties. None is included in any MSA.

This District exhibits a pattern with a twist; where high overall and startup retention rates most often go hand in hand with low levels of 

startup activity and modest high growth concentrations, the District indicates a slightly above average high growth index which could partially 

offset weaker entrepreneurial and retention vitality patterns. At the same time, the relatively small numbers of firms involved in any high 

growth index, and the high proportion of small ones, suggest that any offset is necessarily partial.

The overall District retention rate is 12 percent above the national level, but two of three vitality measures, including both sales and job 

change rates, lag both the US and Appalachia significantly. The aggregate sales per employee indicator is only about two-thirds of the 

national average. Business out-migration is 0.4 percent of the pool of firms tracked from 1996, and 0.7 percent of survivors, not a significant 

issue. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of 

area firms that ceased operations in the interim.

Sales per employee positioning leads in only a handful of industries, including non-metallic mining, plastics, non-durable wholesale, personal 

and educational services. Retained firm vitality indices are high across both sales and job measures in livestock production, non-metallic 

mining, building construction, stone-clay-glass, several retail segments, insurance and personal and legal services.

0.68 1.02

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13G

2001 firms analyzed: 3,615

Startups:

305

11.9%

0.61

53 30

29 55% 1.17

566,667 1,082,759 91.1% 0.75

7 12 71% 1.07

356 347 97% 1.17

70,833 90,230 27% 0.66

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,948 47 2.41% 1.05

2,428 11 0.63

2,695 10 0.37%

2,906 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,837 2 0.0700% 0.37

0.45%

0.94

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is the District’s weakest link, showing a summary index only 61 percent of the US average, fully twenty-six points behind the 

Appalachian level. Rates are in leading brackets, however, in extraction and metalworking industries, as well as credit institutions and 

restaurants.

Vitality ratings are mixed among the small number of retained startups. While sales vitality and sales per employee levels are low, job vitality 

rates are above average. However, the small number of firms involved in the retained startup analyses could lead to undue influence of job 

vitality emanating from a handful of firms.

High growth concentrations in the District are slightly above national norms, with all of the leading numbers in the smallest employment 

class examined, Class I (began the analysis period with fewer than five jobs, ended with more than ten). While the Class I and aggregate 

indices are impressive performances, the scale and distribution is not enough to fill the gap created by modest retention vitality and, 

especially, low levels of entrepreneurial activity.

Aggregate : All Classes 2,906 60 2.06% 1.02
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13H

2001 firms analyzed: 2,435

Retention:

1,692 983

979 58% 1.15

456,895 531,266 16.3% 0.32

11 16 45% 1.09

17,575 15,947 91% 1.18

76,149 75,895 0% 0.73

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.15 0.60

Retained Firms

US = 1.00

ARC District 13H is administered by the Region 8 Planning and Development Council, including Grant, Hampshire, Hardy, Mineral and 

Pendleton Counties. Mineral is also included in the Cumberland MD MSA.

Scores in this District indicate classic patterns of modest economic vitality – high retention rates coupled with lower vitality among retained 

firms, weak startup activity and correspondingly low concentrations of high growth firms. The District’s link (through Mineral County) to the 

Cumberland MD MSA is of modest scale and assistance, since the MSA’s vitality performance is only marginally higher in critical categories, 

and lower in some.

While overall retention rates are very high (and above Appalachian averages), the positive impact is partially lost in very low sales vitality 

ratings and low sales per employee indicators among retained firms. Job vitality measures are much higher and aggregate scores are in fact 

above national and Appalachian averages. While too small to be considered a meaningful measure, business out-migration is only 0.2 

percent of firms from the 1996 pool, and 0.4 percent of survivors – far from the District’s most problematic issue. While the number of migrant 

firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in 

the interim.

Retained firm sales per employee indicators are at or above national levels in a small number of industries, including non-metallic mining, 

wood products, stone-clay-glass, motor freight, personal and health services. Among industries with significant numbers of facilities, only a 

few outperformed national indices in both job and sales vitality measures, including several of the same industries with high sales per 

employee rates. These included crop production, non-metallic mining, wood products, real estate, personal and educational services.

0.73 0.65

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13H

2001 firms analyzed: 2,435

Startups:

209

11.8%

0.60

41 26

26 63% 1.36

541,935 1,292,000 138.4% 1.14

6 10 67% 1.00

225 252 112% 1.35

108,387 129,200 19% 0.94

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,082 14 1.29% 0.56

1,342 8 0.82

1,508 7 0.46%

1,591 1 0.0600% 1.12

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,563 2 0.1300% 0.67

0.60%

1.17

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is the weakest link in the District, registering entrepreneurial rates 40 percent below the national average and twenty-seven 

points under the Appalachian index. While lagging the US and Appalachia itself, startup activity rates in the MSA also lead the district by 

seventeen index points. District startup activity rates are higher than US levels only in crop production, stone-clay-glass, industrial machinery 

and limited retail segments.

While vitality measures among retained startups are high in the District, the number of firms identified for the analysis is very limited, 

increasing the chances of data distortions. Both sales and job vitality indices lead US averages in all jobs and sales measures. Even sales 

per employee rates among retained startups approaches the national level and is even with the Region’s. High rates in a small number of 

firms appear to impact the aggregate rating considerably. The same is true for leading vitality measures in the small number of wood 

products, construction, industrial machinery and retail industries which provide the major elements of high aggregate startup vitality scores. It 

is important to remember the limited number of firms – and impact – involved.

Growth firm concentrations fall far short of both national and Appalachian levels – and short of compensating in any significant way for gaps 

in the District’s entrepreneurial and retention vitality. Aggregate high growth concentrations are 65 percent of the national average, and while 

the District rates highly in two larger employment classes, no more than a handful of firms are involved. The MSA provides little opportunity 

here; it’s concentrations of high growth firms trails the District by thirteen index points.

Aggregate : All Classes 1,591 21 1.32% 0.65
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13I

2001 firms analyzed: 3,941

Retention:

3,036 1,518

1,501 49% 0.98

397,355 407,986 2.7% 0.05

10 13 30% 0.72

29,282 19,565 67% 0.87

66,226 58,284 -12% 0.56

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.98 0.84

Retained Firms

US = 1.00

ARC District 13I is administered by the Region 9 Eastern Panhandle Regional Planning and Development Council, including Berkeley, 

Jefferson and Morgan Counties. Berkeley and Jefferson, which host the bulk of the District’s business establishments, are also at the far 

western end of the Washington DC MSA.

Although most of its economy is included in the Washington DC metropolitan area, vitality performance in the District suggests that much of 

the MSA’s influence has yet to reach it. Summary District vitality ratings look much more like those of a struggling but viable rural LDD than 

an integral part of a thriving MSA, possibly a result of the five-year time series used for these analyses. While the District’s retention patterns 

are modest (in line with many growth areas), the high indices which are common dynamic areas, including high entrepreneurial and growth 

firm measures, are hard to find.

Aggregate retention rates are just below the national average and, more importantly, job and sales vitality measures among retained firms are 

low across the board. By contrast, the MSA leads the nation and Appalachia in every retention vitality measure. Sales per employee levels 

are barely more than half of the national level. Business out-migration is 0.6 percent of firms tracked from the 1996 pool, and 1.1 percent of 

survivors, somewhat high for a District of this configuration. While the number of migrant firms is the same in both calculations, the pool of 

firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Sales per employee rates appear to lead national averages in only a small number of industries, including agricultural services, transportation 

equipment, personal services and amusements. A handful of industries representing a limited number of retained firms also developed high 

indices in both sales and job vitality measures. These include food products, transport equipment, instruments and lodging.

0.56 0.92

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13I

2001 firms analyzed: 3,941

Startups:

445

16.4%

0.84

77 38

38 49% 1.05

416,949 297,222 -28.7% 0.00

5 6 20% 0.30

352 209 59% 0.71

83,390 49,537 -41% 0.36

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,934 42 2.17% 0.95

2,421 16 0.91

2,682 6 0.22%

2,827 0 0.0000% 0.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,761 2 0.0700% 0.38

0.66%

0.56

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

At 16 percent below the national rate, startup activity is only slightly lower than the Regional index of 0.87. However, low levels of vitality 

among retained starts, coupled with relatively weak retention vitality measures, suggest that more is needed. However, in addition to value 

added manufacturing industries like food products, plastics and a number of metalworking industries, startup rates are above average in a 

variety of industries which can be indicators and sometimes drivers of new growth – business services, legal services, engineering-research 

and several financial segments. These could be indicators of a better economy beginning to spill over from the east.

At the same time, the vitality of startups tracked from 1996 – a time series which may not have captured recent metro-based spillover – is not 

encouraging. Leading sales per employee indicators are limited to retail and, more hopefully, business services and lodging. Building 

construction, lodging and business services all score well in job and sales change indicators – very good signs if this picture indeed 

represents the start of an economic influx which has since intensified.

Concentrations of high growth firms are consistent with Appalachian levels, falling 8 percent short of national patterns. Concentrations peak 

in the smaller employment classes. Again, it is possible that intensified influence from the MSA has created a larger growth firm population 

since the 1996 pool, which would be missed by this time series.

Aggregate : All Classes 2,827 53 1.87% 0.92
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13J

2001 firms analyzed: 3,543

Retention:

3,325 1,888

1,871 56% 1.12

461,293 805,976 74.7% 1.47

12 17 42% 1.00

38,552 32,098 83% 1.08

65,899 80,598 22% 0.78

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.68

Retained Firms

US = 1.00

ARC District 13J is administered by the Region 10 Bel-O-Mar Regional Council and Planning Commission, including Marshall, Ohio and 

Wetzl Counties. Marshall and Ohio Counties also comprise about half the business population in the Wheeling MSA and the bulk of

establishments in the District.

Vitality trends in the MSA track those in the District quite closely. High economy-wide and startup retention rates are matched by sluggish 

startup activity and low vitality rates among retained startups. However, solid vitality ratings among mature firms and leading high growth firm 

concentrations mitigate the effects of modest entrepreneurial activity.

Overall retention rates are 12 percent above the national average and four index points ahead of the Region. This is a significant District 

advantage since, unlike many high retention areas, vitality indices among retained firms are also in leading positions. One discordant note: 

Aggregate sales per employee positioning is substantially below national and Appalachian levels, suggesting that 1996-2001 vitality indices 

reflect an effort to catch up, rather than lead. Nevertheless, the same measures suggest that the District is beginning to pull up even. 

Business out-migration rates are a modest 0.5 percent of the 1996 pool of firms tracked, and 0.9 percent of survivors, not a major cause for 

concern in an MSA-dominated district. While the number of migrant firms is the same in both calculations, the pool of firms to which it is 

compared diffes by the number of area firms that ceased operations in the interim.

The sales per employee index for retained firms is a real issue; among significant industries and value added services, only engineeringresearch leads national rates. The number of industries demonstrating high indices in both sales and job vitality measures is larger, including 

food products, wood products and furniture, paper products, printing, communications, non-durable wholesale, legal services and engineeringresearch.

0.78 1.19

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13J

2001 firms analyzed: 3,543

Startups:

319

13.3%

0.68

88 48

47 53% 1.14

589,706 583,721 -1.0% 0.00

6 8 33% 0.50

550 380 69% 0.83

84,244 83,389 -1% 0.61

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,960 58 2.96% 1.29

2,500 28 1.55

2,880 15 0.52%

3,094 2 0.0600% 1.16

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,025 7 0.2300% 1.22

1.12%

1.31

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity and retained startup vitality are the District’s weakest links. Entrepreneurial activity rates are 32 percent below the US average 

and nineteen index points behind the Region. Leading rates of startup activity are limited to a handful of industries with significant numbers of 

establishments, including primary and fabricated metals, transport services, financial institutions and brokers, and legal services.

The vitality picture among surviving startups is not encouraging. Retained startup firms demonstrate low vitality indices across both sales and 

job categories, as well as a lagging sales per employee index; only retained restaurant startups appear to lead national patterns in the sales 

per employee measure. Good ratings are almost as infrequent in other categories; only motor freight, wholesale durables, automotive and 

legal services register high indices in both sales and job vitality measures.

High growth concentrations in the area are excellent, leading the solid performance among retained firm vitality measures overall. The 

District leads US and Appalachian high growth concentrations in every employment class, as does the MSA. For now, these potential 

economic engines must be counted on to compensate for the District’s serious lags in entrepreneurial activity and vitality.

Aggregate : All Classes 3,094 75 2.42% 1.19
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13K

2001 firms analyzed: 1,648

Retention:

1,478 853

841 57% 1.13

761,589 1,022,504 34.3% 0.68

17 14 12% 0.28

22,725 15,449 68% 0.88

108,798 127,813 18% 1.23

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.13 0.68

Retained Firms

US = 1.00

ARC District 13K is administered by the Region 11 B-H-J Metropolitan Planning Commission, including Brooke and Hancock Counties. The 

two counties are home to about half of the business establishments in the Steubenville-Weirton MSA.

Like a number of other West Virginia Districts, 13K indicates a generally unusual pattern of vitality indices, including strong aggregate 

retention rates coupled with high concentrations of growth firms and seriously lagging entrepreneurial activity and vitality measures. In this 

case, the gap in entrepreneurial vitality is compounded by generally sluggish vitality measures among mature retained firms.

Business out-migration rates are 0.8 percent of the 1996 pool of firms tracked and 1.4 percent of the survivor population, slightly high for an 

MSA of this size, but not the major cause for concern. While the number of migrant firms is the same in both calculations, the pool of firms to 

which it is compared differs by the number of area firms that ceased operations in the interim. District retention rates are 13 percent above the 

national average and five index points ahead of the Region. However, indices among retained firms lag significantly in all sales and job vitality 

measures, although the aggregate current retained firm sales per employee rate is well above national standards. This is clearly due to the 

disproportionate influence of the primary metals industry on the ratings. Aside from primary metals only a handful of industries, including 

apparel, wholesale non-durables, personal and educational services, evidence high sales per employee ratings.

A few industries outperform national ratings in both sales and job vitality indices: building construction, fabricated metals, industrial 

machinery, wholesale durables, health and educational services among them.

1.23 1.10

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

ARC West Virginia 13K

2001 firms analyzed: 1,648

Startups:

146

13.2%

0.68

28 9

9 32% 0.69

210,000 257,143 22.4% 0.18

4 3 -25% 0.00

114 29 25% 0.31

52,500 85,714 63% 0.62

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

875 23 2.63% 1.14

1,117 10 1.24

1,250 8 0.64%

1,350 1 0.0700% 1.32

'96 Firms in Class High Growth 96-01 % High Growth US Index

1,319 4 0.3000% 1.60

0.90%

1.62

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates and startup retention both trail US and Appalachian levels by very significant margins; both are just a little less than twothirds of average. Among industries with more than a single identified startup, only some retail segments, credit institutions and brokerages 

and the lodging industry lead national startup patterns. Among retained startups, only restaurants display higher than industry average sales 

per employee rates, and only retained startups in the motor freight and brokerage industries indicate leading scores in both sales and job 

vitality measurements.

Like a number of other West Virginia Districts with unusual vitality patterns, District 13K also reflects leading concentrations of high growth 

firms in all employment classes. And as in the others, these potential economic engines must be counted on to compensate for the District’s 

serious lags in other vitality measures.

Aggregate : All Classes 1,350 30 2.22% 1.10
ARC Firm Formation and Retention Analysis 1996-2001

Metro Albany-Schenectady-Troy, NY

2001 firms analyzed: 35,047

Retention:

32,369 15,967

15,859 49% 0.97

681,132 1,687,768 147.8% 2.91

12 17 42% 1.00

365,081 268,058 73% 0.95

97,305 210,971 117% 2.03

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.97 0.91

Retained Firms

US = 1.00

Despite lags in most vitality measures against national averages, the Albany MSA is outpacing much of upstate New York. All summary 

growth measures come within 10 percent of US trends, some higher, although some of the positive statistics are more representative of a 

handful of firms or industries than overall vitality. Startup activity, at 9 percent below the national average, is still ahead of many northeast 

areas. Startup survival is 10 percent below national trends, a particular problem in an area with such low startup activity rates. Overall 

retention is at a virtual dead heat with national patterns and the aggregate high employment growth firm rate is significantly lower than US 

norms. The sales per employee rate for surviving firms appears excellent at first blush, but seems largely due to a data spike in a single 

industry. This MSA could generate future growth opportunities and clusters which could spill over to nearby ARC areas, especially Schoharie 

County and nearby counties in New York’s Southern Tier East. Good vitality in several traditional manufacturing industries and insurance 

could be mined for opportunities nearby.

Survival and retention rates for the MSA are strong, although slightly below US averages. Only a tiny fraction of firms (0.03 percent) migrated 

outside the area during the review period. Sales change among surviving firms was almost three times the US average, attributable to specific 

industries discussed below. At the same time, constrained job growth among survivor firms limited job change and replenishment figures to 

95-100 percent of US patterns, yielding an impressive sales per employee rate among MSA firms retained during the 1996-2001 period.

Raw retention levels themselves were just below the US average. Higher retention patterns were evident in key industries, including transport 

services and motor transport as well as business services. While some manufacturing industries (rubber/plastics and fabricated metals) held 

their own in the retention category, most others rated below average. Communications showed very poor retention levels. However, survivors 

in some of the trailing industries performed quite well in other measures. Chemicals, transport equipment, wood, furniture, communications, 

plastics and petroleum related industries all performed well. Sales growth among surviving firms was poor in both business services and 

motor transport. Business services survivors also fared poorly in the job change measure, although professional services did well. Machinery, 

health services and electronics likewise rated high.

High sales per employee ratings were anchored by growth in the insurance industry, which caused an unusual data spike. High ratings are 

also apparent in social services, fabricated metals, chemicals, education, primary metals plastics and personal services.

2.03 0.88

0.00

0.50

1.00

1.50

2.00

2.50

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Albany-Schenectady-Troy, NY

2001 firms analyzed: 35,047

Startups:

4,182

17.8%

0.91

772 346

343 44% 0.95

578,549 824,834 42.6% 0.35

8 13 63% 0.94

6,143 4,280 70% 0.84

96,425 103,104 7% 0.75

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

19,760 415 2.10% 0.91

24,198 188 1.07

27,290 111 0.41%

29,101 12 0.0400% 0.74

'96 Firms in Class High Growth 96-01 % High Growth US Index

28,495 44 0.1500% 0.81

0.72%

1.03

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Significant levels of startup activity were apparent in a variety of manufacturing industries and value added services, including chemicals, 

legal services, non-depository financial institutions, communications and food products. Most other manufacturers, including technology 

related instruments and plastics, were within 10 percent of national norms. Although fabricated metals reflected a lower rate, other 

metalworking industries – primary metals, industrial machinery, instruments and transportation equipment – all reflected robust startup 

activity. (The last three also had industry retention rates at or above 90 percent of the national average.) Both business and professional 

services indicated startup activity below national levels.

Startup survival, sales and job change rates were below national patterns. Retail, construction trades and motor freight transportation 

indicated very positive startup retention, but very few value–added industries showed good startup retention and significant levels of startup 

activity. 

Job growth among startups in the professional services and various FIRE industries was strong, but weak virtually everywhere else. Likewise, 

replenishment rates in most industries looked weak, although good performance in professional and health services was encouraging. Sales 

per employee rates among surviving starts look particularly promising in fabricated metals (limited numbers), both business and professional 

services and construction.

Despite low aggregate ratings, the MSA leads US patterns for high growth firms in two important small business categories: Classes II and 

III. These are sandwiched by lower high growth scores among both smaller and larger firms. The smallest firms rate 0.91, supporting the 

findings of lower growth trends among MSA startups. Scores are even lower among larger firm classes, where MSA rankings lag US 

patterns by 19 percent-26 percent.

It is important to bear in mind that while these high growth firms may develop as engines for future area growth, the high growth firm 

segment represents only a small fraction of area vitality, accounting for less than 2 percent of all firms.

Aggregate : All Classes 29,101 519 1.78% 0.88
ARC Firm Formation and Retention Analysis 1996-2001

Metro Allentown-Bethlehem-Easton, PA

2001 firms analyzed: 25,107

Retention:

22,593 12,329

12,236 54% 1.08

464,175 710,154 53.0% 1.05

12 16 33% 0.80

247,011 190,718 77% 1.00

77,362 88,769 15% 0.85

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.77

Retained Firms

US = 1.00

Like a number of other northeast MSAs, Allentown sports a high business retention index which is not supported by other vitality measures. 

Startup activity is only about three-quarters of the national rate. Concentrations of high growth firms are significantly below US norms in 

every class size evaluated. While the MSA touches on ARC District 9D (Economic Development Council of PA), only Carbon County is 

actually a part of the Allentown MSA. Still, the MSA’s strengths could enhance opportunities in the southern portion of the district.

Overall, both retention and sales change among survivor firms are high. However, job growth among survivors and job expansion activity is 

low to modest, combined with a survivor sales per employee index which is 15 percent below the national average. The combination of factors 

suggests low sales rates to begin with that are beginning to catch up – but only just. 

As in other areas, business out migration, at 3 firms (0.04 percent), is not a major issue.

At the same time, there is clearly a significant amount of budding development in the MSA: multiple segments of the construction industry 

reflect high retention rates, some coupled with high sales change patterns among survivors. Retention is mixed among manufacturers, but 

strong in traditional needle trades, where both sales and job growth patterns are keeping pace with the national industry, and surpassing it in 

some replenishment measures. The plastics industry shows high retention and good survivor sales growth. Metalworking is mixed and 

fabricated metals weak, but industrial machinery seems to be booming, with good retention and high sales and job indices. Transportation 

equipment and instruments also rate highly in multiple vitality categories.

Retention rates are also high in all transportation industries except rail in this traditional center, and include leaders in sales and job change 

indices among survivors. Solid retention ratings and leading job vitality in communications suggest telecommunications inroads. Both 

professional and business services, including computer-related, show high retention and survivor job growth ratings.

0.85 0.86

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Allentown-Bethlehem-Easton, PA

2001 firms analyzed: 25,107

Startups:

2,576

15.1%

0.77

666 344

340 51% 1.09

558,759 1,017,152 82.0% 0.67

13 22 69% 1.04

8,261 7,318 89% 1.06

111,752 127,144 14% 0.92

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

13,777 275 2.00% 0.87

16,968 88 0.72

19,146 62 0.32%

20,390 9 0.0400% 0.79

'96 Firms in Class High Growth 96-01 % High Growth US Index

19,954 32 0.1600% 0.84

0.72%

0.82

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Mirroring the general Pennsylvania experience, startup activity rates are low across the board. Even in industries chock full of high sales 

change survivors, like construction, startup activity remains low. Among manufacturers, only food products (0.95) and electronics (1.14) show 

impressive levels of startup activity, which is likewise low in motor freight. Reflecting local attention, air services startup activity is high, though 

still modest in absolute terms. Communications and telecommunications startups are scarce. Activity levels are low throughout the FIRE and 

Services sectors, with the exception of health services, which is 3 percent above US levels.

While startup retention and survivor job change are quite good overall, sales levels of surviving starts are low and bring down the sales per 

employee rate of successful startups to about 8 percent below average. Growth among startups seems sluggish even in the dynamic

construction industries. Job and sales change among surviving manufacturing startups appeared sluggish with the exception of instruments. 

Startup experience in major service industries was positive, with high retention and growth patterns evident in personal services, business 

services and health.

Allentown’s weak concentration of high growth firms is spread fairly evenly across the five class sizes examined. The MSA hosts only a 

small number of firms which qualify for the high growth index, but is particularly weak in Class II, firms which began with few than ten 

employees and grew to more than 25. The MSA’s somewhat better ratings are found among smaller firms, which could be plumbed for

eventual expansion opportunities in ARC counties.

Aggregate : All Classes 20,390 355 1.74% 0.86
ARC Firm Formation and Retention Analysis 1996-2001

Metro Altoona, PA

2001 firms analyzed: 5,116

Retention:

4,616 2,812

2,794 61% 1.20

556,155 855,362 53.8% 1.06

13 17 31% 0.74

56,492 46,914 83% 1.08

92,692 106,920 15% 1.03

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.20 0.69

Retained Firms

US = 1.00

Unlike many of the MSAs reviewed for this analysis, the Altoona MSA, contiguous with Blair County PA, is totally contained within an ARC 

district, one of two such metro areas within the Southern Alleghenies District. As an emerging regional commercial center, the MSA 

commands a very high retention rate among more mature firms and startups alike. Concentrations of high growth firms are very strong in 

every class except Class II – firms which began with under 10 jobs and grew to more than 25 over the five-year period. However,

entrepreneurial vitality lags significantly, as startup rates are less than 70 percent of the US average. Bottom Line: Development agencies in 

the area are currently developing initiatives to address the issue of entrepreneurial vitality, which looms as a glaring weakness in an 

otherwise increasingly sound picture.

Altoona’s very strong retention rate is both a tribute to area stability and a lament over weak entrepreneurial vitality. MSA firms have 

expanded in concert with sales growth, leading to high sales change rates among survivors and correspondingly high sale per employee 

rates. Business out-migration from this small MSA is almost negligible.

Retention is particularly high among construction trades, suggesting dynamic ongoing development, although the sales change index for 

survivors is mixed. Metalworking industries reflect high retention and good job replenishment rates, suggesting numerous expansions. 

Transportation, communications and particularly retail industries seem very strong in most retention measures, as do business, health and 

the array of professional services. While data on average job change among survivors is ambiguous, replenishment data (indicating 

expansions) is very positive. The sales per employee index is only positive in nine major industries, but these are almost all among the largest 

services, and account for over 25 percent of all MSA firms. No manufacturers are included.

1.03 0.98

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Altoona, PA

2001 firms analyzed: 5,116

Startups:

482

13.5%

0.69

125 73

73 58% 1.25

395,699 490,323 23.9% 0.20

12 14 17% 0.25

1,397 986 71% 0.85

79,140 81,720 3% 0.59

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,840 69 2.43% 1.06

3,553 23 0.89

4,009 19 0.47%

4,266 4 0.0900% 1.68

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,169 12 0.2900% 1.51

0.72%

1.20

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup rates are low pretty much across the board. The MSA’s manufacturing sector is small, and even a handful of startups in any given 

industry (printing, fabricated metals) pushes the startup activity rate beyond US trends. With the exception of restaurants, not a single industry 

with more than ten starts indicated a startup activity rating above US averages. Business service startups are very low and have been 

recommended to development agencies in the area as a focus of attention.

While startup survival is quite positive, the performance of those surviving startups is not. Indices for sales change, job change and sales per 

employee among surviving startups are all very low. Legal services, printing, electronics, personal and professional services all reflect 

performance bright spots in either sales or job change indices. In some major industries, including business services, no startups from 1996 

were identified.

Although the MSA suffers from statewide lags, an added reason for entrepreneurial sluggishness in the MSA could be the relative

dynamism of the area’s engine firms. The MSA reflects an aggregate high growth firm concentration just under the US average, but the 

weakness is concentrated in Class II (beginning under 10 jobs and ending with more than 25). All other size classes show concentrations of 

high growth firms well above US averages, boding well for future dynamism from these existing engines. At the same time, the MSA’s small 

size necessarily makes this exclusive club small as well – about 85 firms or just under 2 percent of the total.

Aggregate : All Classes 4,266 85 1.99% 0.98
ARC Firm Formation and Retention Analysis 1996-2001

Metro Anniston, AL

2001 firms analyzed: 4,235

Retention:

4,021 2,061

2,047 51% 1.01

433,754 743,824 71.5% 1.41

11 15 36% 0.87

42,342 30,375 72% 0.93

72,292 82,647 14% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.01 0.97

Retained Firms

US = 1.00

The Anniston MSA touches on Calhoun County AL, part of the East AL Planning Commission (1E). It is a small MSA with solid summary 

scores in several vitality measures. MSA business retention runs slightly above the US norm, a stability factor underscored by a startup 

activity rate which is only three points below the national rate – a lag, but one which surpasses most ARC districts. Startup survival rates, 

too, register above national norms. Only the MSA’s aggregate high growth firm concentration rate lags badly, more than 25 percent below the 

US average. While this raises questions about the basis for MSA’s future drivers, the concern is mitigated by the combination of strong 

retention and adequate levels of entrepreneurial vitality and stability.

Retention rates are just over US averages. Business out-migration is not a significant issue and sales change rates for survivors are 

significantly higher than US trends over the five-year period. At the same time, job change among survivor firms has been relatively slow, 

improving the sales per employee ratio for the MSA. (That index remains below the US average.)

Construction indices are high in both retention and sales change categories. The MSA also has a significant metalworking cluster (primary 

and fabricated metals, industrial machinery and transportation equipment) which scored highly in multiple vitality measures. The small 

communications industry also did well, but business services fared poorly. Professional and health services, on the other hand, appear vital.

0.80 0.73

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Anniston, AL

2001 firms analyzed: 4,235

Startups:

527

19.0%

0.97

96 46

46 48% 1.02

1,282,716 2,700,000 110.5% 0.91

13 29 123% 1.85

1,239 1,351 109% 1.31

142,524 128,571 -10% 0.93

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,227 40 1.80% 0.78

2,837 14 0.68

3,175 8 0.25%

3,393 3 0.0900% 1.58

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,307 6 0.1800% 0.95

0.72%

0.64

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity keeps pace with the vitality of longer-term firms. Activity rates are only 3 percent below the US average. Startup sales growth 

rates are slightly below US norms overall, but job change and replenishment among the same firms far outpaces national patterns. Startup 

sales per employee run somewhat below US levels.

The highest levels of startup activity are in various construction industries (still slightly below the US average) and in several retail groups. 

Construction startup job and sales change rates also run better than US trends. Business services starts (including computer-related) are on 

a par with US averages. Health and professional startup rates are high. Other industries do not provide any clear patterns relative to startup 

growth experience, and the scale of survivors is distributed widely enough among industries and low enough overall (fewer than 100 startup 

survivors from the 1996 group) to make conclusions difficult.

Concentrations of high growth firms are quite low in all classes except the larger Classes IV and V. Scores in Class I, II and III raise 

concerns about the level of dynamism among smaller (and in many cases, newer) firms in the MSA – and their ability to create spillover 

effects for nearby regional counties.

Aggregate : All Classes 3,393 50 1.47% 0.73
ARC Firm Formation and Retention Analysis 1996-2001

Metro Asheville, NC

2001 firms analyzed: 9,971

Retention:

8,241 4,418

4,346 53% 1.05

536,249 674,386 25.8% 0.51

12 17 50% 1.20

93,527 76,806 82% 1.07

89,375 84,298 -6% 0.81

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.05 0.89

Retained Firms

US = 1.00

The Asheville MSA includes two counties, Buncombe and Madison, within ARC 7B, the Land-of-Sky Regional Council. The MSA itself 

reflects mixed vitality ratings. Overall retention rates measure about 5 percent above US averages, while startup vitality is somewhat lower – 

11 percent below US startup activity levels and 9 percent below startup survival rates, This combination is problematic for the MSA, since the 

combination of lagging entrepreneurial activity and survival compound each other. In addition, high growth firm concentrations run 16 percent 

below average.

While retention rates are themselves positive, the MSA indicates a higher than usual propensity to lose firms to out-migration rather than 

simple failure. While only 72 firms were identified as out-migrants from the 1996 analysis group, this still represents a relatively high number. 

Moreover, the sales change among the survivor group of firms in the MSA lags considerably behind US norms. At the same time, survivor job 

change is reported at high levels, depressing the sales per employee ratio among survivor firms from 1996 throughout the MSA. While sales 

per employee rates are affected by many factors, including industry mix, Asheville’s 0.81 indexed rating is far below par.

Retention and growth patterns among survivor firms in various construction industries are quite good, suggesting that current development 

demand may be reflecting positive trends. Retention and survivor sales and job change rates among the several significant metalworking 

industries, especially fabricated metals, electronics and transportation equipment are impressive. Solid retention and survivor sales and job 

change among transportation industries, especially trucking, warehousing and transport services, suggest regional hub activity. Technologybased communications industries present a retention concern. However, business and professional services, including computer related, 

legal and engineering, have maintained positive retention and survivor vitality patterns.

0.81 0.84

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Asheville, NC

2001 firms analyzed: 9,971

Startups:

1,195

17.4%

0.89

325 160

139 43% 0.91

274,249 456,115 66.3% 0.54

11 7 -36% 0.00

3,358 1,017 30% 0.36

54,850 65,159 19% 0.47

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,678 100 2.14% 0.93

5,932 39 0.91

6,726 20 0.30%

7,230 2 0.0300% 0.49

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,033 7 0.1000% 0.52

0.72%

0.75

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates 0.89 on the US index, a particular concern because startup survival is likewise almost 10 percent below average. A 

significant proportion of startup firms from 1996 relocated from the MSA, despite the propensity of startups to stay in place for the first several 

years of operation. Sales and job vitality rates for startup survivors are low.

There are few concentrations of startup activity in the MSA. Activity rates in construction trades, industrial machinery, printing and trucking are 

below average. Retail reflects sluggish startup activity, although new firms through the FIRE sector – in banking and real estate alike – have a 

significant lead on US patterns. Technology-driven communications, business services (including computer-related) and engineering all lag. 

Only legal stands above the pack among potential value-added services. Health services startup activity is even with US trends.

Those industries showing significant numbers of surviving startups reflect somewhat sluggish vitality experience. Job and sales growth rates 

tend to be somewhat below average in construction, wholesale, retail trades and, although startup retention is excellent, in business services. 

Engineering is almost alone in consistent high vitality measures among surviving startups.

While there is a steep range of indexed scores that make up the MSA’s aggregate score of 0.84 for high growth firm concentrations, the 

range is entirely below US trends. The MSA’s biggest strength in this category – still 7 percent-9 percent below average – is in the small 

Class I and Class II firms.

Aggregate : All Classes 7,230 123 1.70% 0.84
ARC Firm Formation and Retention Analysis 1996-2001

Metro Athens, GA

2001 firms analyzed: 5,856

Retention:

4,129 2,289

2,255 55% 1.08

460,188 665,301 44.6% 0.88

13 19 38% 0.92

52,412 41,633 79% 1.03

76,698 83,163 8% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 1.05

Retained Firms

US = 1.00

With the exception of a lagging High Growth Firm index, the Athens MSA, touching only Madison County in GA 2E’s Northeast Georgia RDC, 

reflects extremely positive vitality ratings. Retention levels, entrepreneurial activity and entrepreneurial survival all run 5-8 percent above US 

patterns.

Coupled with an overall retention index of 1.08, business out-migration rates are not a major concern. Sales and job change among surviving 

firms lag US patterns. By the same token, job replenishment is 3 percent above average, testament to expansion activity among surviving 

firms. The sales per employee index remains low despite the good replenishment rate, suggesting low average sales which are still catching 

up from 1996 levels.

Retention rates are high in significant clusters, including agricultural services and construction. Most manufacturing industries show retention 

rates below average. Vitality appears quite high in very transportation industry and mode, although employment replenishment appears to be 

outstripping the sales change among survivors. Financial institutions do well in vitality indices, but business services and communications 

retention and survivor growth is sluggish. Professional services appear strong across the board, as do health and legal, suggesting more 

demand for business services than is currently evident.

0.80 0.70

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Athens, GA

2001 firms analyzed: 5,856

Startups:

776

20.5%

1.05

173 87

87 50% 1.07

381,379 737,500 93.4% 0.77

6 7 17% 0.25

926 642 69% 0.83

63,563 105,357 66% 0.77

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,291 45 1.96% 0.85

2,970 13 0.60

3,438 7 0.20%

3,721 1 0.0300% 0.48

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,621 2 0.0600% 0.29

0.72%

0.51

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although the index is high, the absolute scale of startup activity is modest, making specific industry analysis difficult. In general, while startup 

retention rates were extremely good, all vitality indicators for surviving startups suggests low growth – both jobs and sales – relative to other 

US starts. 

High points of startup activity include agricultural services, transportation industries and communications, including telecommunications. 

Strong activity among eating establishments and miscellaneous retail indicate new levels of commercial dynamism. These are seconded by 

high activity levels among business services, personal services, health, legal and educational services. Among these, however, only surviving 

startups in agricultural services and retail showed real industry-wide vitality.

The MSA’s 0.70 high growth firm index is led by the smallest (Class I) firms at 85 percent of the national average, those likely requiring the 

longest lead time to become regional engines. Performance among the larger employment classes lags by truly significant margins of 40-70 

percent depending on the class. While individual firms may develop spillover effect for the nearby LDD, the likelihood of sustained and 

overall impact from a high growth sector is marginal relative to most US areas.

Aggregate : All Classes 3,721 53 1.42% 0.70
ARC Firm Formation and Retention Analysis 1996-2001

Metro Atlanta, GA

2001 firms analyzed: 181,987

Retention:

124,349 55,849

55,428 45% 0.89

572,022 1,254,993 119.4% 2.35

12 20 67% 1.60

1,448,979 1,123,087 78% 1.01

95,337 125,499 32% 1.21

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.89 1.41

Retained Firms

US = 1.00

One of the largest MSAs touching on the Appalachian Region, Atlanta exhibits unmistakable vitality which could provide significant spillover 

effects to multiple ARC districts.

Atlanta’s low retention rate is troubling at first glance, but deeper investigation suggests that the retention measure may be more a sign of 

newly emerging vitality and turnover than anything else. Startup activity rates are enormously high – 41 percent above US norms, far 

outpacing the churn reflected by lower startup survival rates. High startup activity is matched by significant advantage in the concentration of 

high growth firms. The sheer number of high growth firms in a MSA this size, coupled with their relative propensity, suggests spin off and 

branch development opportunities among outlying areas.

While the general retention rate is low, the experience of surviving firms presents a more positive picture than in many areas which rate more 

highly. Out-migration is just over 400 firms from the 1996 pool, a very low loss-level for an MSA of almost 125,00 business establishments. 

Vitality measures for retained firms are strong across the board: sales change rates for survivors run more than twice the national average, 

while average job change and survivor replenishment indicate employment experience among stable firms well above the national average. 

Aggregated sales per employee rates are high.

Construction vitality is evident. Major construction industries indicate high sales and job vitality scores coupled with relatively low retention 

(and high startup activity rates). Atlanta’s manufacturing sector experiences even lower retention rates overall, but almost all industries reflect 

high survivor sales and most look good in the job change and replenishment category. Electronics and industrial machinery, the two 

manufacturing industries most involved with the technology cluster, performed especially well in sales change and (for electronics) 

employment vitality categories. The technology industries themselves, especially communications, delivered impressive vitality measures 

across the board. The impact of lower retention rates is mitigated by high startup activity rates. Supporting this activity, professional and legal 

services also performed well in vitality measures, as did tourist and business related support areas such as hotels.

In general, surviving firms in the Atlanta MSA are pushing out very high levels of sales and employment vitality, creating the conditions for 

spin-off opportunity in almost every major industry, including the communications cluster.

1.21 1.11

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Atlanta, GA

2001 firms analyzed: 181,987

Startups:

32,480

27.6%

1.41

5,491 2,242

2,198 40% 0.86

630,321 1,363,679 116.4% 0.95

8 16 100% 1.50

40,844 34,633 85% 1.02

105,054 104,898 0% 0.76

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

82,821 2,086 2.52% 1.10

102,740 851 1.14

116,414 563 0.48%

124,578 97 0.0800% 1.39

'96 Firms in Class High Growth 96-01 % High Growth US Index

121,669 308 0.2500% 1.33

0.72%

1.22

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Low overall retention rates and high survivor vitality find their complement in the MSA’s astonishing startup activity rate, almost half again 

above the US average. Startup activity is well above the US level in almost every major industry, including every manufacturing group except 

tobacco. Over 500 new – and likely technology-oriented – manufacturers were identified in metalworking industries alone, with particularly 

high concentrations and raw number in industrial machinery and electronics. Corresponding molding industries also showed high activity. All 

transportation services and modes indicate high vitality levels, as does every finance, retail and service industry, including those (such as 

computer related business services) which appear relatively weak in the general retention vitality measures.

Surviving startups, face high competitive difficulties from the area’s vibrant longer-term surviving firms, but still showed sales change levels 

only about 5 percent below average. These are coupled with high scores in both average job change among surviving startups and job 

replenishment rates indicating expansions. Sales per employee among surviving starts are disappointingly low in aggregate, possibly due to 

early job growth.

Leading construction startup vitality measures match those of longer-term construction firm survivors in both sales and job indices. Startups in 

traditional industries like apparel and wood furniture appear to be sparking a small scale revival in retention and growth measures, Surviving 

electronics startups show strong job and sales change figures, in tandem with surviving new firms in communications. (Startup survival in both 

industries is low.) But low startup survival, like low retention rates in general in the MSA, appear to go hand in hand with vibrant survivors. 

This is also the pattern for transportation and other value-added industries. Once again, the support industries – hotels, legal services and 

then like – appear to be benefiting across the board from the dynamism developed by core value-added sectors, through high retention, sales 

change, job change and replenishment rates.

Atlanta’s impressive concentration of five-year high growth firms (11 percent above average) varies upward with employment class size. 

Class I firms, the smallest, are just below the MSA average at 1.10, while the largest class, Class V, still holds almost 100 firms and rates 

39 percent above US averages. Class II and III include over 1,400 firms; their concentration rates run 14-22 percent above average.

Aggregate : All Classes 124,578 2,800 2.25% 1.11
ARC Firm Formation and Retention Analysis 1996-2001

Metro Binghamton, NY

2001 firms analyzed: 8,818

Retention:

9,155 4,715

4,666 51% 1.01

435,780 620,551 42.4% 0.84

13 19 46% 1.11

114,225 87,647 77% 1.00

72,630 77,569 7% 0.75

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.01 0.82

Retained Firms

US = 1.00

Situated by New York’s Southern Tier East district, the Binghamton MSA reflects a retention rate slightly higher than US levels. However, the 

engine of high growth firm concentrations among survivors lags by about 9 percent. While startup survival rates are high, startup activity itself 

is significantly under par. This indication, coupled with the low concentration of high growth firms, suggests a concern about future area 

vitality. Focus might be on fabricated metals, electronics and machinery firms, which reflect some outstanding ratings for the area.

Performance among surviving firms from the 1996 pool is solid. Retention overall runs about 1 percent above average, and is supported by 

high levels of average job change among survivors from the 1996 pool average as well as on-target job replenishment. These figures together 

indicate good expansion performance among survivor firms and the retention of both larger firms and smaller businesses which have grown 

over the analyzed period. The relative lag in high growth firms may be compensated for by this overall solid performance. General sales 

performance among survivors does not however, appear as positive, and sales per employee aggregate figures remain low.

Retention and survivor job vitality in the most important construction trades appear low, suggesting constraints ongoing development activity 

in the MSA. The most concentrated manufacturing industries are fabricated metals, industrial machinery and electronics, covering 160 

surviving firms. All three industries show high retention and high replenishment rates, indicating solid expansion activity among survivor firms. 

Although relative sales per employee rates remain low, sales change among survivors in machinery and electronics are both very positive. 

Retention among communications firms is also high, although sales and job vitality among survivors is mixed. More positive is the survivor 

performance in business services, including computer, which reflects outstanding performance across the board – in retention as well as 

sales, job change and replenishment vitality categories. Retention and related vitality measures are mixed in support services with potential 

export capability – legal, health and engineering.

0.75 0.91

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Binghamton, NY

2001 firms analyzed: 8,818

Startups:

958

16.0%

0.82

196 104

99 51% 1.08

350,932 1,204,598 243.3% 2.00

7 11 57% 0.86

1,400 1,043 75% 0.90

70,186 133,844 91% 0.97

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,335 113 2.12% 0.92

6,541 46 0.97

7,405 21 0.28%

7,890 2 0.0300% 0.45

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,717 14 0.1800% 0.95

0.72%

0.72

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is the weakest element of the MSA’s vitality index. Aggregate startup rates run about 18 percent below the US average. While 

aggregate data indicates significant positive sales change among startup survivors, the small number of those reporting sales data diminishes 

the weight of the finding. Almost 100 surviving startups reported employment figures, and here the news is not so good: Both job change and 

replenishment are 10 percent or more below US patterns for startup survivors, indicating low growth patterns among survivors from an original 

group which was smaller than it should have been.

Although widely spread by industry, startup survivors appear to have struggled across the board. Surviving startups appear to have begun on 

a large scale or experienced good expansion activity in transportation equipment and motor freight. Startup experience in fabricated metals 

appears very good, indicating high scores in all vitality measures.

The MSA’s high growth concentrations are best among small firms (Class I and II) and in Class IV, where small numbers of firms were still 

enough to push the Class rating to 0.95. Although these higher scores in small business groups slightly diminish concerns about sluggish 

entrepreneurial vitality, it is important to note that even in these classes high growth concentrations run 5-9 percent below average.

Aggregate : All Classes 7,890 146 1.85% 0.91
ARC Firm Formation and Retention Analysis 1996-2001

Metro Birmingham, AL

2001 firms analyzed: 35,431

Retention:

31,802 16,064

15,950 50% 1.00

602,151 1,130,143 87.7% 1.73

13 20 54% 1.29

402,487 316,767 79% 1.02

86,022 125,571 46% 1.21

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.00 1.10

Retained Firms

US = 1.00

The Birmingham MSA economy is central to ARC District 1E, the Birmingham Regional Planning Commission, and includes four of the

district’s counties. Fortunately, the MSA’s economic engines appear to be the carriers of significant vitality ratings which could be 

increasingly felt in outlying counties.

Aggregate retention rates in the MSA are on par with national measures. As discussed below, this should be viewed as far better than 

average performance due to the growth experience of surviving firms. Startup activity runs 10 percent above average, pumping high 

concentrations of new vitality into the MSA (recent startup performance is even higher). Startup survival lags US patterns, but is not unduly 

low for an area with good retention and high startup activity. Finally, the concentration of high growth firms is at national levels. Combined 

with the MSA’s startup vitality, the high growth concentration creates a vital economic engine in the MSA.

It would be hard to find a better set of aggregate retention scores. The MSA’s pool of firms from 1996 not only were retained on a par with 

national rates, but performed significantly better than average surviving firms in other areas. Out-migration, at less than .04 percent, is very 

low. Sales change among survivors runs more than 70 percent above the national average, suggesting a combination of high growth and the 

survival of larger firms. Both average job change among surviving firms and replenishment are above national norms, indicating solid 

expansion activity and retention of larger firms as well. Aggregate sales per employee rates run 21 percent above the national average.

Food products and apparel both indicate positive vitality in both retention and job and sales change measures among surviving firms. Primary 

metals and industrial machinery are leaders in survivor job and sales change among metalworking industries, which also display high 

retention rates. The technology-oriented instruments industry is also a leader, while electronics appears to have experienced some retention 

and growth problems among survivors. Wholesale trades are booming by all vitality measures. Retention and growth among surviving 

financial institutions is significant. If there is a slightly troublesome area, it is in the technology sector, where the performance of both 

communications and business services firms (including computer-related) do not consistently attain average national levels. All vitality 

patterns among survivors in other export-oriented support sectors (legal, health, professional services) is excellent.

1.21 1.00

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Birmingham, AL

2001 firms analyzed: 35,431

Startups:

4,968

21.4%

1.10

1,199 533

526 44% 0.94

628,945 1,292,795 105.6% 0.87

8 16 100% 1.50

9,456 8,081 85% 1.03

89,849 107,733 20% 0.78

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

19,908 502 2.52% 1.10

24,806 172 0.96

28,241 124 0.44%

30,517 17 0.0600% 1.00

'96 Firms in Class High Growth 96-01 % High Growth US Index

29,712 62 0.2100% 1.10

0.72%

1.11

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Beginning with an impressive startup activity rate (10 percent above the US average), Birmingham appears to be constantly replenishing its 

strengths. New construction starts and the demand they evidence are underpinned by high levels of startup activity in the MSA’s core 

industries, including the needle trades, fabricated metals, industrial machinery and instruments. Even electronics, where surviving firms reflect 

some growth issues, displays a high startup activity rate. Transportation-related starts are very strong across the board. Most export services 

also reflect good startup activity, including communications and business services, which showed weaker retention experience. Support 

services are spawning high startup rates to keep up with demand. 

Likewise, the area’s core industries, including apparel, industrial machinery and instruments, are supporting high levels of startup survival. 

Retention and survivor sales and job change measures among retained electronics startup firms are impressive. All vitality rates among 

surviving business technology services are high, although startup retention rates in the industry are themselves below average.

While the MSA’s high growth firm concentrations score a solid 1.00, its highest levels are in Class I and Class II and IV – firms at different 

small and mid-size points on the spectrum. This mirrors the area’s enviable vitality among retained firms in concert with the ability to 

generate a large stream of new, vital and growing smaller firms. This combination of old and new vitality patterns seems to ensure a 

dynamic future with which the LDD can benefit.

Aggregate : All Classes 30,517 622 2.04% 1.00
ARC Firm Formation and Retention Analysis 1996-2001

Metro Canton-Massillon, OH

2001 firms analyzed: 14,441

Retention:

14,283 7,873

7,797 55% 1.08

531,397 849,705 59.9% 1.18

12 16 33% 0.80

165,351 126,919 77% 1.00

75,914 84,970 12% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.86

Retained Firms

US = 1.00

The Canton area reflects typical vitality scores for many heartland areas: Higher than average retention for both longer-term and startup 

firms, coupled with somewhat lower vitality engines in both startup activity and high growth firm concentrations. In Canton’s case, retention 

rates 8 percent above average are muffled by startup activity which trails by 14 percent and concentrations of high growth firms which are 

almost 20 percent behind US averages. The MSA’s combined gaps in overall entrepreneurial vitality and high growth concentrations suggest 

continued reliance on traditional industries and the leading performance within them.

Supported by a high retention rate, the area’s average sales change rate for survivors appears notably high. This could reflect outstanding 

performance among survivors, a possible product of changing industry mix among survivors or simply the survival of the largest firms from the 

original group. The low average job change rate is also inconclusive, although solid replenishment performance suggests expansionary 

growth among surviving firms. Despite the high sales change levels, sales per employee rates remain low.

Five-year performance by surviving construction firms indicates high levels of retention and good vitality patterns. Growth and expansion 

rates, as well as retention, are also impressive in the MSA’s core plastic and related machinery industries. Both industries surpassed US 

trends in every retention vitality measure, often by significant margins. Together the two industries encompassed over 250 surviving firms 

from 1996. Vitality ratings were also high in the area’s other traditional industry strongholds – fabricated metals, transportation equipment and 

instruments. Although the number of firms is limited, retention and vitality patterns in chemical industries appeared quite strong. Financial and 

especially insurance industries appeared strong in the FIRE sector. Telecommunications appeared weak while business services, including 

computer, reflected vitality patterns at or near national levels. This mixed picture is underscored by relatively low vitality growth patterns 

among business support industries, including legal and professional services.

0.82 0.81

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Canton-Massillon, OH

2001 firms analyzed: 14,441

Startups:

1,682

16.8%

0.86

379 190

185 49% 1.04

616,254 1,581,366 156.6% 1.28

10 16 60% 0.90

3,648 3,038 83% 1.00

88,036 143,761 63% 1.04

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

8,588 174 2.03% 0.88

10,781 49 0.63

12,222 28 0.23%

13,135 6 0.0500% 0.82

'96 Firms in Class High Growth 96-01 % High Growth US Index

12,835 19 0.1500% 0.78

0.72%

0.58

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

In a very modest show of startup activity, the chemical industry is an area leader. In contrast to industry retention vitality, construction firm 

startup activity is below par, as are entrepreneurial levels in wholesale durable trades. Alone among retail industries, miscellaneous retail 

outperformed national patterns, although surviving startups here did not seem to do well in vitality growth measures. Communications, 

business and professional support services were all weak in startup activity.

Most startups also had a difficult time with vitality growth measures. Despite overall good aggregate scores, construction starts did not do well 

in either job or sales measures, nor did most core manufacturing industries. Small numbers of startups survived and scored well in fabricated 

metals and instruments, but not in the area’s leading industrial machinery group. Startup survival and vitality were poor in both 

communications and business services. While retention reached US levels in several business support services, vitality rates were lacking.

While the MSA achieved high growth concentrations of 88% of the national average among the smallest (Class I) firms, ratings diminished 

from there. All larger firm-size classes—with the exception of a handful of high growth firms in the largest class – scored between 53 

percent and 78 percent of the national average high growth concentration. The MSA’s combined gaps in overall entrepreneurial vitality and 

high growth concentrations suggest continued reliance on traditional industries and the leading performance within them. New sources of 

vitality continue to be an issue.

Aggregate : All Classes 13,135 217 1.65% 0.81
ARC Firm Formation and Retention Analysis 1996-2001

Metro Charleston-North Charleston, SC

2001 firms analyzed: 20,565

Retention:

8,750 4,567

4,513 52% 1.02

529,156 977,020 84.6% 1.67

14 17 21% 0.51

114,639 78,239 68% 0.89

75,594 108,558 44% 1.04

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 1.07

Retained Firms

US = 1.00

Summary measures paint a solid picture of economic vitality. Higher than average retention rates are backed by impressive startup vitality (7 

percent above US averages) and leading concentrations of high growth firms in smaller business segments. Even startup survival, which 

could be anticipated to weaken in the face of strong competition, is almost on a par with national norms. The combination of startup activity 

and small firm growth suggest a dynamic future as these firms develop into engines for the MSA economy.

Good aggregate retention performance is backed by high levels of sales change among surviving firms. Sales per employee rates are 

correspondingly high, in tandem with very modest job vitality among surviving firms.

Growth and expansion among survivor construction firms appears strong, backed by high vitality measures in the real estate industry. 

Retention in many industries is strong, but vitality – both sales and job change among survivors – does not appear to follow suit. Industrial 

machinery and electronics – two leading technology based industries – are exceptions, proving leading vitality rates in survivor sales change, 

job change and replenishment categories alike. The still-emerging nature of the MSA’s dynamic economy is hinted at by the low sales per 

employee rate, even in these flagship manufacturing industries. Transportation Services likewise suggest high average job change and 

growth rates among survivors. While communications retention rates are strong, vitality of retained firms is not. Business services are strong 

in retention and sales change measures, but employment vitality has not kept pace. Support services (legal, engineering) do better.

1.04 1.06

0.96

0.98

1.00

1.02

1.04

1.06

1.08

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Charleston-North Charleston, SC

2001 firms analyzed: 20,565

Startups:

2,733

20.9%

1.07

255 120

118 46% 0.99

771,875 2,226,126 188.4% 1.55

10 22 120% 1.80

2,430 2,544 105% 1.26

77,188 111,306 44% 0.81

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

10,194 272 2.67% 1.16

12,952 102 1.09

14,784 64 0.43%

15,804 6 0.0400% 0.68

'96 Firms in Class High Growth 96-01 % High Growth US Index

15,439 27 0.1700% 0.92

0.72%

1.09

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity overall runs 7 percent above the US average. But even this positive level of vitality masks the real dynamism of the area’s 

core industries. Demonstrating vital development opportunities, construction trades all reflect startup activity rates of 1.10 or better. 

Entrepreneurial activity in manufacturing is impressive: 1.54 in food products, 1.11 in wood and furniture, and more than twice national levels 

in primary and fabricated metals. Industrial machinery rates are 22 percent above US averages, and instruments more than 50 percent 

higher. Communications and business services both lag by more than 15 percent, a significant concern. At the same time, activity rates for 

business and professional services are elevated.

 Overall, startup retention is solid and retained startups lead national trends in every vitality measure – survivor sales change, job change and 

replenishment. Data on surviving startups is unfortunately limited for this MSA, although it is clear that even where start rates and startup 

survival are low (e.g., business services), the experience of surviving startups indicates high vitality measures.

High growth firm concentrations are particularly strong in the smaller job classes (Class I, II, III), and somewhat under-performing in larger 

classes IV and V. This tendency fuels the notion that Charleston’s best days are to come, as its small high growth firms and core of vital 

entrepreneurial activity matures.

Aggregate : All Classes 15,804 339 2.15% 1.06
ARC Firm Formation and Retention Analysis 1996-2001

Metro Chattanooga, TN-GA

2001 firms analyzed: 19,239

Retention:

15,135 7,866

7,811 52% 1.02

625,042 779,725 24.8% 0.49

13 19 46% 1.11

191,595 148,596 78% 1.01

89,292 86,636 -3% 0.83

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 1.12

Retained Firms

US = 1.00

The Chattanooga MSA includes Hamilton and Marion counties in the Southeast Tennessee Development district (11E). The area shows a 

solid retention index, and a good level of job vitality among retained firms. Startup activity is very positive at 12 percent above national 

trends. But startup survival rates are very modest and concentrations of high employment growth firms run 17 percent below national 

patterns. However, the vitality of longer-term firms, startup survivors, and the aggressive startup activity rate all couple with leading 

concentrations of larger growth firms to produce an impressive image of area vitality.

While sales data may be low due to data distortions (and does not include headquarters and branch inputs), both average job change and job 

replenishment among retained firms leads national patterns. Taken together, the two suggest a combination of good retention rates among 

larger firms and good expansion rates overall. 

Retention and survivor vitality are quite strong in a number of core industries including agricultural services and construction trades. 

Manufacturing industries with consistently high vitality measures include paper products, chemicals, and three metal-based industries – 

primary metals, industrial machinery and transport equipment. Although retention rates are low, survivor vitality is impressive in the 

instruments industry. Survivor job growth and expansion appear significant in trucking and warehousing. The technology-oriented

communications and especially business services industries reflect high levels of vitality in the job growth measures, and the boom in 

personal services may reflect a new level of resulting disposable income. Support services are holding their own.

0.83 0.83

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Chattanooga, TN-GA

2001 firms analyzed: 19,239

Startups:

2,723

21.8%

1.12

479 198

195 41% 0.87

652,747 1,737,647 166.2% 1.36

13 28 115% 1.73

6,279 5,325 85% 1.02

93,250 115,843 24% 0.84

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,937 201 2.02% 0.88

12,411 79 0.88

14,025 54 0.39%

15,031 10 0.0700% 1.19

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,681 27 0.1800% 0.97

0.72%

0.97

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

As was true for retention performance, startup activity rates are extremely positive in core industries. Agricultural services experienced a 

startup activity rate almost half again the US average. Construction ran 19 percent-34 percent over national levels. Among goods producers, 

wood products demonstrated entrepreneurial activity fully 11 percent-69 percent above average in various industries. Chemicals starts were 

35 percent above average, and primary metals, industrial machinery and transport equipment also showed leading numbers. Among the core 

vital manufacturers, only paper did not lead in entrepreneurial activity. Transportation startup activity was high, and communications and 

business services, which lagged in retention measures, demonstrated entrepreneurial rates higher than US averages, as did support services 

like engineering.

Job vitality among startups was high as well; average survivor sales change, average survivor job growth and replenishment measures all led 

national patterns by significant margins. The level of entrepreneurial activity and vitality of retained startup firms more than makes up for the 

low startup survival rates in the MSA. Retained industrial machinery, instruments and transportation equipment firms were leaders in area 

vitality measures.

Interestingly, the area’s high growth concentrations were led by larger employment classes (II, IV, V). While most classes and the aggregate 

score are below US averages, they are high enough (in conjunction with entrepreneurial measures and the performance of retained firms) to 

suggest a continuing flow of growth engines from core industries in the MSA, starting with today’s growth firms and continuing through to 

tomorrow’s maturing entrepreneurial startups.

Aggregate : All Classes 15,031 254 1.69% 0.83
ARC Firm Formation and Retention Analysis 1996-2001

Metro Cincinnati, OH-KY-IN

2001 firms analyzed: 65,161

Retention:

55,529 31,188

30,839 56% 1.10

569,358 900,086 58.1% 1.15

14 20 43% 1.03

737,937 606,553 82% 1.07

81,337 100,010 23% 0.96

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.98

Retained Firms

US = 1.00

The Cincinnati MSA includes a number of ARC counties throughout Ohio and Kentucky. This large MSA’s influence will increasingly impact 

even outlying ARC districts and counties.

At the leading edge of heartland vitality, the metro’s indexed scores are impressive both individually and as a group. The weakest among 

them, startup activity, is nonetheless almost at US average levels – an accomplishment for most heartland MSAs, and a distinct advantage 

over other Ohio areas covered by this analysis. Other ratings surpass national patterns, including an aggregate retention rate 10 percent 

above average, startup survival 11 percent above average, and concentrations of high growth firms 13 percent above national norms. Sales 

and job vitality measures support the overall picture of high retention and impressive growth engines. In the case of startup activity, slightly 

lagging area-wide patterns mask dynamism in specific industries.

While a little over 500 firms from the 1996 universe left the MSA during the analysis period, creating a slightly higher out-migration total than 

other metros, the number is not a significant concern in light of Cincinnati’s 1.10 retention index score. Much more important is the 

demonstrable vitality of retained firms, whose sales change index stands 15 percent above US patterns. Both survivor job change and 

expansion-related replenishment figures also suggest high levels of retained firm performance. 

Vitality of retained firms shows across a wide array of durable and non-durable goods manufacturers. In addition to agricultural services which 

are likely already involved with rural areas, retained firms in a number of manufacturing industries demonstrate job and/or sales vitality which 

create prime candidates for cluster orientation in ARC counties, including textiles, paper, chemicals, plastic and related industrial machinery, 

electronics and instruments. Transport and transport services in all modes show high levels of retained firm vitality as well. Job change 

among retained communications firms leads US patterns by significant percentages, and booming vitality in survivor real estate and 

discretionary retail industries (e.g., restaurants) suggest a general aura of consumer activity. Business services, including the technology 

sector, are strong across the board.

0.96 1.13

0.85

0.90

0.95

1.00

1.05

1.10

1.15

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Cincinnati, OH-KY-IN

2001 firms analyzed: 65,161

Startups:

8,079

19.1%

0.98

1,619 867

844 52% 1.11

589,031 1,755,925 198.1% 1.63

10 16 60% 0.90

15,359 13,179 86% 1.03

98,172 175,593 79% 1.28

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

32,905 929 2.82% 1.23

41,543 389 1.29

47,547 261 0.55%

51,338 39 0.0800% 1.36

'96 Firms in Class High Growth 96-01 % High Growth US Index

49,970 126 0.2500% 1.33

0.72%

1.39

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup activity is almost at national levels overall, it is weaker in important manufacturing industries dominated by healthy, more 

matured firms (e.g., plastics, industrial machinery). Startup activity rates are most aggressive in the MSA’s emerging industries – 

communications and telecommunications and among financial institutions of several types. Startup rates in business services are puzzlingly 

low.

Those startups which survived the first five years of operation do well. Not only are startup survival rates good, but survivor sales change and 

job replenishment figures suggest dynamism and expansion. Startup survivors in chemicals, fabricated metals, electronics and instruments 

create impressive pictures of vitality in virtually all measures. Likewise, retained startups in transportation services appear quite dynamic, with 

high scores in both job vitality measures. Performance among retained startups in many service industries (including business services) is 

mixed, although support industries including legal and engineering score well across the board.

Finally, the MSA shows a high concentration of high growth engine firms. Interestingly, the aggregate High Growth score is lower than each 

of the class scores. This indicates that a number of firms qualified for inclusion in multiple categories due to extraordinarily high growth that 

ramped them through multiple classes (for example, a firm which began with fewer than five employees but grew to more than 25). This 

itself suggests the vibrancy generated by high growth engines, of which Cincinnati has more than its “share”.

Aggregate : All Classes 51,338 1,179 2.30% 1.13
ARC Firm Formation and Retention Analysis 1996-2001

Metro Cumberland, MD-WV

2001 firms analyzed: 3,403

Retention:

2,824 1,663

1,654 59% 1.16

398,349 470,497 18.1% 0.36

12 15 25% 0.60

31,413 25,121 80% 1.04

66,392 67,214 1% 0.65

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.16 0.77

Retained Firms

US = 1.00

The Cumberland MSA is at the heart of ARC District 4A, the Tri-County Council for Western Maryland. It also includes Mineral County WV, 

part of West Virginia’s Region 8 Planning and Development Council.

The Cumberland MSA’s vitality rating indicate a common, if more pronounced version of vitality patterns common to sluggish areas. These 

include high retention, to some extent due to competitive lags, low growth rates among retained firms, coupled with slow startup activity and 

lagging startup survivor vitality rates. Following the same pattern, startup retention rates are slightly higher than average. In Cumberland’s 

case, this pattern includes very low startup activity (23 percent below national averages) and very modest concentrations of high growth 

firms. Taken together, these measures reflect serious gaps in the MSA’s economic vitality.

Retention patterns are quite high (16 percent above national trends), but they are conditioned by very low vitality measures in most cases. 

Survivor sales change rates are low in both sales and job measures. Higher replenishment figures suggest that a handful of industries – 

health services appears to be one – have experienced significant vitality which affects overall measures.

Wood products and furniture industries show good vitality scores in job expansion and sales growth measures among retained firms, but most 

other manufacturers appear to be lagging US patterns. Some trucking firms seem to have experienced employment growth. But emerging 

industries in other areas, like communications, lag badly. Job and sales change patterns among retained firms in retail and banking are well 

below national trends. Business service trends, including computer related services, are sluggish.

0.65 0.52

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Cumberland, MD-WV

2001 firms analyzed: 3,403

Startups:

342

14.9%

0.77

64 32

31 48% 1.04

354,717 400,000 12.8% 0.10

8 9 13% 0.19

458 275 60% 0.72

59,120 80,000 35% 0.58

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,581 22 1.39% 0.61

2,081 8 0.53

2,413 6 0.25%

2,560 1 0.0400% 0.70

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,511 2 0.0800% 0.42

0.72%

0.63

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup vitality rates mirror the problems among retained firms. Only a handful of industries show startup levels even approaching US norms, 

and the scale of these is generally too small for meaningful analysis. Retail, which has significant numbers of starts, still under-performs US 

trends by a large margin. Services, both business and personal, also lag but less so. Engineering is one of the few industries reflecting 

startup activity rates above national norms. 

Only 64 retained startups were identified for the five-year analysis, a number too small for meaningful breakouts. Miscellaneous retail did well 

and even with scant information, business services retention appeared high. Overall, however, retained startup firms exhibited extremely low 

vitality patterns in both sales and job measures.

The MSA’s high growth index is only about one-half the US average. Class I and Class III firms do slightly better, but high growth firm 

concentrations still trail by about 40 percent. The high growth engines in other nearby metros such as Altoona are virtually absent here.

Aggregate : All Classes 2,560 27 1.05% 0.52
ARC Firm Formation and Retention Analysis 1996-2001

Metro Decatur, AL

2001 firms analyzed: 5,246

Retention:

4,463 2,490

2,457 55% 1.09

505,719 931,636 84.2% 1.66

14 18 29% 0.69

60,953 44,259 73% 0.94

72,246 103,515 43% 1.00

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.86

Retained Firms

US = 1.00

The Decatur MSA covers two of the three counties in ARC District 1B, the North Central AL Regional Council of Governments. Despite its 

small scale, which in the Region often indicates a small rural MSA beset by numerous economic problems common to rural areas, the 

Decatur MSA seems to have created some small pockets of significant vitality despite shortfalls and concerns.

Summary indicators do not deliver any special sense of vitality. High overall retention rates, sluggish startup activity (in this case 

compounded by below par startup survival) and minimal concentrations of high growth firms all fit the mold of other low vitality metros. But 

the stability and modest strength of retained firms – both longer term and relatively new – may at least sustain the health of this MSA for the 

immediate future. In the long run, additional vitality from high growth engines and entrepreneurs is needed.

The aggregate retention rate runs 9 percent above national averages. While sales change indicators among surviving firms are quite good, 

most of the change seems to have occurred in a handful of high volume, capital-intensive industries – primary metals, fabricated metals, 

chemicals and petroleum related. In general, job vitality scores are lower. However, in fabricated metals and chemicals, both of which contain 

significant numbers of the firms for the area, vitality measures led US trends in most categories. Transportation industries appeared generally 

strong, with weaknesses in trucking. Communications vitality was modest, but business services showed high performance in most 

measures, including retention, sales change and job replenishment; job change among survivor registered about 9 percent below average. 

Professional business support services were weak in all vitality measures.

1.00 0.86

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Decatur, AL

2001 firms analyzed: 5,246

Startups:

570

16.9%

0.86

124 58

55 44% 0.95

1,436,190 5,677,358 295.3% 2.42

7 16 129% 1.93

839 899 107% 1.29

205,170 333,962 63% 2.42

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,482 58 2.34% 1.02

3,233 22 0.94

3,656 11 0.30%

'96 Firms in Class High Growth 96-01 % High Growth US Index

0.72%

0.76

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Overall startup activity rates fell significantly behind US trends (scoring 0.86), but some important MSA industries did well. All metal trades, 

electronics and instruments showed small numbers of startups, but enough to create activity rates above US levels. Trucking activity scored 

1.11 and transportation services were 5 percent above the national average. But communications, business and professional services all 

rated low.

Although aggregate startup survival rates ran 5 percent below average, industries with a larger numbers of 1996 startups did well: major 

construction industries scored above average, as did machinery and miscellaneous retail. Startup vitality ratings were very high in aggregate, 

lending hope to a somewhat troublesome situation beset, among other things, with a lack of entrepreneurial vitality itself. However, the most 

significant elements of startup vitality, especially sales change among survivors but also job vitality, appeared to emanate from the retail 

sector, with smaller boosts from retained startups in primary metals and motor freight transportation.

Although aggregate concentrations of high growth firms are low and no Class V high growth firms could even be identified, smaller Class I 

firms are found in higher concentrations in the MSA than the rest of the nation. The concentration of Class II growth firms runs only 6 

percent below national patterns. While too small to have a major current impact, these firms and others which emerge from the 

entrepreneurial pool could provide future vitality engines for the MSA and its ARC counties.

Aggregate : All Classes 69 1.75% 0.86
ARC Firm Formation and Retention Analysis 1996-2001

Metro Elmira, NY

2001 firms analyzed: 3,270

Retention:

3,397 1,772

1,759 52% 1.03

539,849 557,381 3.3% 0.06

13 16 23% 0.55

41,207 28,483 69% 0.90

67,481 69,673 3% 0.67

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.03 0.73

Retained Firms

US = 1.00

Chemung County, part of NY’s Southern Tier Central Regional Planning and Development Board (ARC District 6B) sits within the Elmira 

MSA. The MSA displays modest vitality indications typical for many northeast and heartland areas, including a high aggregate retention rate 

and high levels of startup retention, but extremely low startup activity rates and lower than average concentrations of high growth firms. In 

Elmira’s case, summary high retention rates are coupled with poor vitality indications among both the general retained firm population and 

startup survivors.

Even in this small MSA the tiny number of firms identified as out-migrants do not create a significant negative impact, and certainly do not 

present the level of problems engendered by low vitality among those which are retained. Despite higher than average retention rates, every 

survivor vitality measure falls significantly below US averages, including change in average survivor sales, change in average employment 

and a replenishment index 10 percent below US levels. 

There are limited positive indications. Construction contractors exhibit good vitality rates, although this is more the case for special trades 

contractors rather than general contractors, a better bellwether for development. Commercial vitality is given a boost by good performance 

among restaurant and personal services firms. Fabricated metals, with only a dozen retained firms from the 1996 universe, also showed high 

vitality ratings. But the bulk of value added manufacturing and export services demonstrate low survivor scores in both sales and job vitality 

measures.

0.67 0.94

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Elmira, NY

2001 firms analyzed: 3,270

Startups:

305

14.2%

0.73

51 26

26 51% 1.09

714,000 330,435 -53.7% 0.00

6 7 17% 0.25

328 182 55% 0.67

142,800 66,087 -54% 0.48

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,895 42 2.22% 0.96

2,444 20 1.13

2,779 12 0.43%

3,951 2 0.0500% 0.90

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,911 6 0.2100% 1.08

0.72%

1.09

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is less than three-quarters of the national rate. Both the MSA and numbers of startups are so small as to render specific 

industry analysis difficult, but it is worth noting that industries with more than ten startups over the period performed poorly in the indexed 

ratings. Construction startup activity was only a little more than half of the national average. Miscellaneous retail, home furnishing stores and 

eating places all exhibited start rates well below US patterns. Real estate and personal services approached US averages, but the lagging 

business services sector fell far behind.

Those startups which survived the five-year analysis period did not fare well as a whole. Sales and job vitality ratings were extremely low in 

aggregate. Especially notable was the low job replenishment score relative to the high percentage of retained starts, suggesting low job 

expansion patterns among survivors. Construction, miscellaneous retail and surviving business services firms (probably responding to gaps in 

supply) were the most notable exceptions to this negative picture.

Elmira’s best category performance is in its concentration of high growth firms which, while limited in number, are enough to place the MSA 

within shooting distance of US patterns. Class II, III and IV concentrations, covering more than 50 firms, actually lead national ratings by 8-

13 percent.

Aggregate : All Classes 3,951 57 1.92% 0.94
ARC Firm Formation and Retention Analysis 1996-2001

Metro Erie, PA

2001 firms analyzed: 10,769

Retention:

8,654 5,159

5,131 59% 1.18

571,284 836,074 46.4% 0.91

15 19 27% 0.64

120,090 94,541 79% 1.02

81,612 83,607 2% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.18 0.72

Retained Firms

US = 1.00

The Erie MSA is contiguous with Erie County PA, the largest county within ARC District 9A, the Northwest PA Regional Planning and 

Development Commission.

Erie has very high retention patterns among both the universe of longer-term firms (18 percent above US averages) as well as startup 

survivors from the 1996 pool identified for this analysis (13 percent above). Like almost every major PA jurisdiction, the MSA also suffers 

from an extremely low startup activity rate (72 percent of average). But continuing stability in the area is helped by a healthy concentration of 

high growth firms, particularly among those in the larger analyzed classes.

Broad vitality ratings patterns run behind US averages in average survivor sales and job change categories, but are slightly ahead of national 

trends in job replenishment. 

Importantly for the MSA, high ratings are exhibited in a number of core industries, including fabricated metals, electronics and miscellaneous 

manufacturing. Retained firms in motor freight transport and transportation services also performed well in vitality ratings. Survivor vitality in 

communications and telecommunications industries appears very strong, as do both durable and non-durable wholesale segments. 

Disappointingly, the area’s keystone plastics industry reflected only modest vitality. (Retention, sales and employment stability in this critical 

industry were very high, perhaps reflecting the relative maturity of many Erie firms.) Business services, a gap in the MSA and its LDD, 

demonstrated good retention but poor vitality ratings. An exception was engineering, which scored well across the board.

0.80 0.98

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Erie, PA

2001 firms analyzed: 10,769

Startups:

1,056

14.0%

0.72

224 122

118 53% 1.13

770,370 1,239,048 60.8% 0.50

12 17 42% 0.63

2,459 2,001 81% 0.98

85,597 137,672 61% 1.00

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,505 128 2.33% 1.01

6,967 55 1.09

7,971 33 0.41%

2,974 2 0.0700% 1.20

'96 Firms in Class High Growth 96-01 % High Growth US Index

8,355 19 0.2300% 1.20

0.72%

1.04

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates were extremely low almost across the board. Notable and important exceptions were in plastics and transportation 

services. High levels of entrepreneurial vitality in the plastics industry are consistent with Erie’s history, and serve as a very positive 

complement to high retention but constrained retained firm vitality noted in the last section. Communications and even more so, business 

services and all professional services, all reflected very low levels of entrepreneurial activity. Industrial machinery startups (often linked 

closely to plastics) were 10 percent lower than US averages but higher than other Erie patterns and should be understood in the context of the 

MSA’s large industrial machinery group, against which relative startup activity is measured.

At the same time, startups in some of the same critical industries did well in vitality measures. The area’s traditional big three industry clusters 

– plastics, fabricated metals and industrial machinery – all retained startup groups that rated highly in job and sales change measures, 

although industrial machinery starts failed at a high rate. Transport services and wholesale industries did well in both retention and job 

replenishment categories. Although business services lagged again, professional services did well in startup retention, survivor sales change 

and job replenishment categories. Surviving construction and personal services startups also reflected solid ratings.

Underpinning Erie’s vitality is a cadre of high growth firms. While aggregate high growth firm concentrations run about 2 percent under US 

averages, scores are higher than US trends in every individual class. This indicates that a number of firms qualified for inclusion in multiple 

categories due to growth that ramped them through multiple classes (for example, a firm which began with fewer than five employees but 

grew to more than 25). Erie’s most concentrated group of high growth firms is Class IV, those which began the measurement period with 

fewer than 50 employees and ended with more than 100.

Aggregate : All Classes 2,974 171 2.00% 0.98
ARC Firm Formation and Retention Analysis 1996-2001

Metro Florence, AL

2001 firms analyzed: 5,065

Retention:

5,081 2,274

2,259 44% 0.88

493,592 855,607 73.3% 1.45

12 16 33% 0.80

59,198 35,428 60% 0.78

70,513 85,561 21% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.88 0.83

Retained Firms

US = 1.00

The Florence AL MSA includes Colbert and Lauderdale counties in ARC’s AL 1A district, the Northwest AL Council of Local Governments. 

The MSA reflects low vitality in all summary measures.

The area retention index stands at 0.88, 12 percent below national averages. This seems particularly troublesome in an MSA that also 

indicates a summary startup activity rate 17 percent below the national average. Although startup activity rates and survival often show up in 

inverse proportions, Florence’s summary startup survival rate is also 30 percent below national levels. Finally, the area concentration of high 

growth firms is only a little over half of the US average. Most aggregate vitality measures within each major category rate low as well.

Although sales change among retained firms is high overall, indications are that this is the result of specific firms and industries rather than 

generalized solid performance. Retained construction industries scored well in vitality indices. Among manufacturing groups with significant 

numbers of firms, printing, wood products, fabricated metals and the smaller instruments group performed extremely well in both retention 

and retained firm vitality analyses. Retained industrial machinery and plastics firms do not appear to have kept up with national vitality indices. 

Retention among both communications and business services firms was solid, but vitality measures were not. The professional services 

industry did well in retention and retained firm vitality across the board.

0.82 0.52

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Florence, AL

2001 firms analyzed: 5,065

Startups:

559

16.3%

0.83

170 56

56 33% 0.70

689,600 1,302,128 88.8% 0.73

9 21 133% 2.00

1,451 1,139 79% 0.94

68,960 59,188 -14% 0.43

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,848 34 1.19% 0.52

3,651 13 0.49

4,152 10 0.24%

8,567 6 0.0700% 1.25

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,334 5 0.1200% 0.61

0.72%

0.61

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Florence indicates a concerning combination of summary low startup activity and startup survival. The vitality ratings of retained startups are 

strong in job change and replenishment categories, but seem unlikely to overcome the lack of entrepreneurial activity and startup failures 

overall. 

Startup activity is limited in absolute scale but relatively strong in needle trades and wood products. Although vitality ratings among startup 

survivors in these industries appear very good, the number of retained firms severely limits the value of the analysis. Startup activity is also 

solid in metalworking trades including fabricated metals and machinery, but here too, retention patterns are too weak over the five-year period 

to meaningfully ascertain the vitality of retained startups. Durable wholesale startup activity is good, but retention and retained startup vitality 

is not. FIRE startup activity is strong across the board – among financial industries as well as insurance and real estate. Startup retention and 

vitality only appear strong among insurance agents and brokers, one of the least economically significant industries.

High growth concentrations are extremely low except in the small Class V, among a handful of relatively large firms. These have no doubt 

played a large role in sustaining local vitality since 1996, but without less mature firms moving into high growth ranks, added entrepreneurial 

activity and more potent retention, this MSA may have little to add to development efforts.

Aggregate : All Classes 8,567 47 1.06% 0.52
ARC Firm Formation and Retention Analysis 1996-2001

Metro Gadsden, AL

2001 firms analyzed: 3,428

Retention:

3,246 1,770

1,756 54% 1.07

491,036 976,364 98.8% 1.95

11 16 45% 1.09

34,013 27,392 81% 1.05

70,148 97,636 39% 0.94

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.07 0.89

Retained Firms

US = 1.00

The Gadsden AL MSA includes a single ARC county, Etowah, in ARC District 1F, the East AL Regional Planning and Development 

Commission.

The MSA contains an unusual mix of vitality measures just below the surface of the summary indices. The summary scores themselves 

create a somewhat low vitality picture of high overall retention coupled with low startup activity rates and unusually low startup survival. High 

growth firm concentrations run almost one-quarter below US averages. In short, the summary scores are themselves typical of somewhat 

depressed areas whose high overall retention rates mask low levels of economic activity and competition.

The change in sales between the 1996 universe and retained firms at the beginning of 2001 suggests either high sales growth patterns 

among retained firms or high levels of survival among those with the highest sales volumes to begin with. Likewise, job change levels among 

retained firms run 9 percent above national patterns. Vitality appears strong among general construction contractors. Vitality patterns in a 

variety of manufacturing industries (many of them with only a handful of firms) appear quite good, including food products, wood products, 

chemicals, plastics, and a variety of metalworking industries including primary metals, industrial machinery, electronics, transportation 

equipment and miscellaneous manufacturing. Retained firms in motor freight and transportation services indicate high vitality rates, as do 

firms in the emerging communications industry. While firms in these industries are not developing high growth concentrations of the scale 

found elsewhere across the US, solid vitality ratings are spread more evenly than is the norm across these industries – especially for an area 

with low scores in other measures.

0.94 0.76

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Gadsden, AL

2001 firms analyzed: 3,428

Startups:

400

17.4%

0.89

109 43

43 39% 0.84

307,368 1,282,927 317.4% 2.60

22 6 -73% 0.00

2,297 259 11% 0.14

61,474 213,821 248% 1.55

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

1,782 34 1.91% 0.83

2,280 13 0.79

2,579 9 0.35%

2,773 2 0.0700% 1.29

'96 Firms in Class High Growth 96-01 % High Growth US Index

2,719 6 0.2200% 1.16

0.72%

0.88

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Low startup activity rates are reinforced by two related categories – very low startup retention scores and correspondingly poor aggregate 

performance among retained startup firms identified for 1996. The low level of retained startups (16 percent below average) performed well in 

sales change rating, but the small number of firms measured for sales limits any conclusions. Based on a still small (but somewhat larger) 

sample of retained startups, job vitality among survivors appears extremely low – leaving the area to rely on a core of solidly performing 

longer-term firms.

At the same time, five-year startup activity rates were notably high in some important MSA industries, including furniture, fabricated metals 

and the emerging communications group. Both durable and non-durable wholesale industries scored high, as did building materials

wholesale/retailers. Business services startups were only slightly lower than US averages – and retention of business services startups from 

1996 outpaced national patterns by almost 50 percent. In every case, very small numbers of surviving startups made specific industry 

analysis difficult.

The MSA seems to host very low concentrations of high growth firms, despite doing quite well in the larger class size ratings (Class IV and 

V). These classes are so exclusive that only a small handful of firms are needed to elevate ratings in a MSA this size. In contrast to many 

other metros, though, vitality seems to rest more on the solid vitality performance of retained firms overall, rather than on the elevation of a 

few high growth engines or the development of new entrepreneurial efforts. This would seem to constrain spin-off opportunities to outlying 

areas, at least in the near future.

Aggregate : All Classes 2,773 43 1.55% 0.76
ARC Firm Formation and Retention Analysis 1996-2001

Metro Greensboro-Winston-Salem-High Point, NC

2001 firms analyzed: 52,485

Retention:

41,485 21,775

21,640 52% 1.04

584,141 887,404 51.9% 1.02

14 20 43% 1.03

564,786 434,226 77% 1.00

83,449 98,600 18% 0.95

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.04 0.94

Retained Firms

US = 1.00

The Greensboro MSA covers three of four counties included in ARC District 7I, the Northwest Piedmont Council of governments. Area vitality 

appears reasonably good. Retention rates among startups and longer-term firms alike are supported by entrepreneurial activity rates which, 

while below US averages, are significantly above most patterns within the ARC region. High growth firm concentrations lag, but are, again, 

higher than the ARC regional average. This generally positive outlook is reinforced by a solid set of vitality indices for new and older firms 

alike, and more positive high growth concentrations in larger firm classes. At 0.03 percent, business out-migration is not a major concern for 

this area.

Greensboro is a sizeable MSA with a large number of significant industry concentrations, many of which reflect good vitality ratings. In 

aggregate, the population of retained firms is dynamic, supporting a better than average retention rate with survivor sales change, job change 

and job replenishment scores at or a few points above the US average. Construction industries show high rates in a number of categories, 

evidencing ongoing development vitality in the MSA. 

Almost every major manufacturing industry rates highly in retention, sales and or job vitality measures, including the needle trades, wood and 

furniture products, chemicals, fabricated metals, industrial machinery and instruments. Retention rates are lower in primary metals, and the 

rubber and plastics industry seems to be experiencing difficulties with both high failure rates and very modest growth and expansion activity 

among surviving firms in the group. Multi-modal transport reflected high vitality measures across the board. Manufacturing industries appear 

to be area mainstays, since more emergent industries, such as communications, do not appear to show corresponding levels of vitality. 

Potential export services in FIRE, including non-depository institutions and securities dealers, reflect multiple high vitality indices. Business 

services (including computer) trail US patterns, although not badly in all categories, and the professional service support industries 

(engineering, legal) and health exhibit high survivor sales indices.

0.95 0.89

0.80

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Greensboro-Winston-Salem-High Point, NC

2001 firms analyzed: 52,485

Startups:

6,244

18.2%

0.94

1,376 689

678 49% 1.05

513,374 1,239,016 141.4% 1.16

9 14 56% 0.83

12,168 9,279 76% 0.92

85,562 137,668 61% 1.00

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

25,602 539 2.11% 0.92

31,951 210 0.91

36,059 126 0.35%

38,786 24 0.0600% 1.11

'96 Firms in Class High Growth 96-01 % High Growth US Index

37,770 70 0.1900% 0.98

0.72%

0.88

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The high vitality of many of the area’s core retained industries is reinforced by exceptional startup activity – not a common pattern. Furniture, 

primary metals, fabricated metals and numerous transportation industries have high levels of entrepreneurial activity. Other industries with 

lower industry-wide vitality scores among retained firms have picked up ground through entrepreneurial efforts – paper products and 

communications stand out. Some financial sectors (non-depository institutions and brokers) reflect high startup vitality indices as well. 

Business services activity remains low.

While startup retention indices are good for most core industries, several exhibit low retention patterns. But even these suggest high levels of 

vitality among survivors. In fact, high startup survivor vitality can be found in a long list of core industries, including paper, chemicals, 

fabricated metals, industrial machinery and transport equipment. Area vitality likely will continue to rest on these industries until further inroads 

are generated in communications, the financial sector or business services.

Greensboro’s high growth concentrations are particularly strong among larger firms in Classes IV and V. These are no doubt reflected in the 

area’s high retention vitality indices as well. Further development of less mature firms into high growth engines would enhance the 

advantages already developed in the MSA and, correspondingly, in outlying areas.

Aggregate : All Classes 38,786 699 1.80% 0.89
ARC Firm Formation and Retention Analysis 1996-2001

Metro Greenville-Spartanburg-Anderson, SC

2001 firms analyzed: 36,832

Retention:

30,027 15,530

15,437 51% 1.02

558,352 860,253 54.1% 1.07

15 20 33% 0.80

431,334 307,551 71% 0.93

79,765 95,584 20% 0.92

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 1.04

Retained Firms

US = 1.00

The Greenville-Spartanburg MSA includes all five counties of the SC Appalachian Council of Governments, ARC District 10A. The MSA 

reflects higher than average summary vitality ratings in every category except startup survival, where trends are 9 percent below average. 

Modestly lower retention rates often go hand in hand with high entrepreneurial activity rates, and are not necessarily a cause for concern. 

Supporting the MSA’s summary vitality index, aggregate concentrations of high growth firms run 5 percent above the national average. From 

a 1996 universe of more than 30,000 tracked firms, fewer than 100 relocated from the MSA by the beginning of 2001. Bottom line: Core 

industries show high retention and vitality ratings, enhanced by impressive ratings among startups.

The area’s above average retention rate is matched by superior aggregate survivor sales change vitality, indicating retention of larger firms as 

well as growth among survivors. It is worth mentioning that as in other areas, numerous branch facilities do not report sales, and would likely 

enhance sales vitality figures. 

Aggregate job vitality measures lag somewhat. However, both traditional industry clusters and those responding to recent developments (e.g., 

the local BMW facility) exhibit high retention and vitality ratings. The MSA’s traditional textile industries boast high retention and replenishment 

indices, but are bested by ratings among retained long term paper products firms. Printing and chemicals are also vitality leaders. However, 

metalworking and other industries more likely related to the BMW development show a commanding series of vitality ratings. These include 

fabricated metals, industrial machinery, electronics and transport equipment. Together these account for over 700 retained firms in the MSA, 

with high survivor sales change, job change and replenishment indices in every industry group. The technology-driven instruments group 

shows very low retention scores, but excellent vitality in all measures among surviving firms. 

Whether independently or as a function of high local manufacturing vitality, business services, including computer-related, also suggest high 

retention and vitality measures. Professional services, as well as health and legal, follow suit.

0.92 1.05

0.85

0.90

0.95

1.00

1.05

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Greenville-Spartanburg-Anderson, SC

2001 firms analyzed: 36,832

Startups:

4,832

20.2%

1.04

1,399 608

597 43% 0.91

507,940 800,943 57.7% 0.47

6 14 133% 2.00

8,351 8,047 96% 1.16

84,657 88,994 5% 0.65

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

19,206 475 2.47% 1.08

23,874 192 1.11

26,878 128 0.48%

28,752 16 0.0600% 0.99

'96 Firms in Class High Growth 96-01 % High Growth US Index

28,081 57 0.2000% 1.07

0.72%

1.20

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The summary startup activity rate of 1.04 is unusually high for the ARC region. Activity is enhanced by high levels of job vitality among 

retained startup firms. Job vitality ratings among retained starts are twice the national average, and job replenishment 16 percent above. The 

dual scores can indicate either the retention of larger starts and good expansion levels among them. 

Startup activity rates are particularly strong in major construction industries, suggesting high ongoing development activity. Wood products 

and plastics/rubber also exhibit unusually high entrepreneurial activity. Fabricated metals and industrial machinery, already concentrated in 

the area, continue to experience high startup activity levels, as does transport equipment and all transportation modes and services. 

Communications lags, as it did in the retention vitality categories. Startup activity in all industries comprising the financial sector is quite 

strong, as it is in other business related services like legal and engineering.

Likewise, retention and vitality are strong among startups in the area’s flagship industries. Construction industries exhibit strong retention and 

vitality scores, as do retained starts in traditional industries like textiles and furniture. Startup performance is also strong in chemicals, 

plastics, industrial machinery and transportation equipment. Startup retention is weak in motor freight, but positive among other transport 

modes. The financial industry indicates high startup vitality and retention ratings, and business services starts rate highly across vitality 

ratings, complementing good scores among longer-term firms.

With the exception of a small lag in Class V, the MSA has leading concentrations of high growth firms in every class and in aggregate. The 

high growth concentrations, coupled with solid retention indices across industries and complementary entrepreneurial vitality focused in both 

traditional and new industries, leads to an extremely positive outlook for the MSA and its ARC counties.

Aggregate : All Classes 28,752 611 2.13% 1.05
ARC Firm Formation and Retention Analysis 1996-2001

Metro Harrisburg-Lebanon-Carlisle, PA

2001 firms analyzed: 25,889

Retention:

23,460 12,621

12,505 53% 1.06

524,424 1,387,269 164.5% 3.25

13 17 31% 0.74

278,033 206,660 74% 0.97

87,404 173,409 98% 1.67

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.75

Retained Firms

US = 1.00

The Harrisburg MSA includes a single ARC county, Perry, at its far edge. Perry County is one of thirteen in ARC District PA 9G, the SEDA 

Council of Governments.

As host to a state capital, the Harrisburg MSA is always somewhat more robust than analysis of private sector data might indicate; the stable 

income of thousands of public sector jobs creates a significant boost in an area of this scale. In the private sector, Harrisburg’s vitality 

performance is mixed. The area boasts very good summary retention rates for both startups and longer-term firms, but startup activity and 

high growth firm concentrations both lag. Out-migration, at 116 firms over five years from the 1996 pool analyzed, is higher than average, but 

still less than one-half of a per cent.

While the area’s survivor sales change index is very high, this appears to be attributable (in Harrisburg’s case) more to the retention of large 

firms than to the general growth of many. More telling are the area’s summary survivor job change vitality (0.74) and replenishment rates, 

both of which indicate lagging job vitality among retained firms.

These trends are reflected in the low vitality of retained construction firms. Higher vitality manufacturing industries which are of reasonable 

scale and might also fit into Perry County’s rural environment include wood products, paper products, printing, plastics, and electronics. The 

MSA also indicates lagging but reasonable levels of vitality in the communications, business services and health industries – but the spillover 

potential here for remote Perry County appears rather low.

1.67 0.81

0.00

0.50

1.00

1.50

2.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Harrisburg-Lebanon-Carlisle, PA

2001 firms analyzed: 25,889

Startups:

2,489

14.6%

0.75

624 323

314 50% 1.08

602,959 4,418,815 632.9% 5.19

10 11 10% 0.15

5,781 3,419 59% 0.71

86,137 490,979 470% 3.57

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

14,602 287 1.97% 0.86

17,933 113 0.87

20,162 70 0.35%

21,564 8 0.0400% 0.66

'96 Firms in Class High Growth 96-01 % High Growth US Index

21,029 29 0.1400% 0.73

0.72%

0.88

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The MSA’s weakest leak is entrepreneurial activity, which registers at only 75 percent of national norms. Construction startups lag severely. 

Significant numbers of manufacturing starts also show high indexed rates in apparel, lumber, industrial machinery and electronics. These 

industries fit well in many rural areas such as Perry County if other conditions are right. Communications, business service and professional 

support services demonstrate low startup activity levels. Legal service startups are above average, predictable in a state capital – and unlikely 

to locate in Perry County very often.

Only a handful of industries showed enough surviving startups to make specific industry analysis meaningful. Retained construction startups 

continued the pattern of relatively low industry vitality. Industrial machinery, which was also high in startup activity, indicated strong retention 

rates and high vitality measures across the board. Retail and especially personal services vitality, both reflected local demand unlikely to 

create value-added activity in the MSA’s ARC county.

The MSA’s aggregate high growth firm concentrations run 19 percent below US averages. While Harrisburg’s lowest concentrations are in 

the largest (Class V) category analyzed, the sheer shortfall in high growth firms in smaller classes is probably more of a concern. As an 

emerging transportation hub and traditional manufacturing center, this area should be developing high levels of entrepreneurial activity and 

looking to new firms to increase high growth engines for the future, a development which would almost assuredly spill over to benefit Perry 

County.

Aggregate : All Classes 21,564 353 1.64% 0.81
ARC Firm Formation and Retention Analysis 1996-2001

Metro Hickory-Morganton, NC

2001 firms analyzed: 12,884

Retention:

11,196 6,127

6,087 54% 1.08

497,993 742,171 49.0% 0.97

15 21 40% 0.96

164,982 124,458 75% 0.98

71,142 82,463 16% 0.79

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.82

Retained Firms

US = 1.00

All three counties of the Western Piedmont Council of Governments (ARC 7E) are included in the Hickory-Morgantown NC MSA. The area’s 

high retention and startup survival summary rates are dampened by low startup activity and concentrations of high growth firms about 9 

percent below US averages. However, retained startup vitality ratings are quite good and the high growth firm concentrations are impressive 

in larger employment size classes.

At 0.35 percent, business out-migration is not a major concern in this MSA. High retention rates (8 percent above average) are supported by 

reasonably good vitality rates among retained firms in aggregate; all measures are within 4 percent of US averages. Construction vitality rates 

are extremely solid. Among traditional core industries in the needle trades, both textile and apparel vitality rates are strong in most measures, 

as are wood products, furniture, paper and chemicals. Plastics and some metalworking industries, especially the industrial machinery 

segment, score high in all job and sales change ratings. Retained electronics firms have not fared as well over the five year analysis period, 

although another technology related manufacturing industry, instruments, indicates very positive vitality ratings among retained firms. The 

transportation industries suggest more difficult retention patterns, but those firms which survive show high vitality ratings – and transport 

services have a high retention rate. Retention rates are high in financial services industries, but vitality measures are not. Both 

communications and business services show mixed ratings struggling to keep up with national performance, while health and engineering 

services both indicate high retention and vitality scores in all categories.

0.79 0.91

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Hickory-Morganton, NC

2001 firms analyzed: 12,884

Startups:

1,369

16.0%

0.82

332 168

165 50% 1.06

693,706 969,014 39.7% 0.33

14 25 79% 1.18

4,302 3,993 93% 1.12

77,078 107,668 40% 0.78

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

6,318 128 2.03% 0.88

8,038 54 0.93

9,071 42 0.46%

9,839 6 0.0600% 1.09

'96 Firms in Class High Growth 96-01 % High Growth US Index

9,553 24 0.2500% 1.32

0.72%

1.17

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While the MSA’s startup activity rate is quite low in aggregate – below even the ARC average – startup retention and job vitality rates among 

retained startup firms is significantly higher, outperforming both ARC and US patterns.

Despite strong performance among all retained construction firms, startup activity remains high – although the sales change performance of 

retained startups is not good. Startup activity rates are weak among most manufacturers, but quite high in some key sectors which 

demonstrated strong industry-wide vitality scores – furniture, plastics and industrial machinery. The combination of high industry retention, 

high industry vitality and correspondingly high ratings in startup vitality measures is both unusual and impressive. Leading ratings in these 

three industries suggests startup vitality which is nurturing new leadership firms even as strong, mature firms remain in the action. 

Communications and service startup activity is weak, although vitality performance among retained business services firms (including 

computer) is better.

Concentrations of high growth firms are 9 percent below the US average overall – but improve considerably in Classes III, IV and V, where 

the MSA takes a commanding lead over US trends. This may be due to the higher vitality ratings among specific manufacturing industries, 

which tend to support larger average facilities, and would thus qualify in the larger employment class ratings. In any case, the high growth 

performance, coupled with good vitality rates among key industries and startup segments, suggests an economy focused on doing a few 

things very well, and capable of creating ongoing benefits from those segments.

Aggregate : All Classes 9,839 182 1.85% 0.91
ARC Firm Formation and Retention Analysis 1996-2001

Metro Huntington-Ashland, WV-KY-OH

2001 firms analyzed: 10,084

Retention:

8,968 5,002

4,972 55% 1.10

486,708 802,921 65.0% 1.28

12 17 42% 1.00

101,089 81,914 81% 1.05

69,530 89,213 28% 0.86

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.84

Retained Firms

US = 1.00

The Huntington-Ashland MSA includes six ARC counties in three states: Lawrence OH (in ARC 8A, the Ohio Valley Regional Development 

Commission); Boyd, Carter and Greenup KY (in ARC 3B, the FIVCO Area Development District); and Cabell and Wayne WV (in ARC 13B,

the Region 2 Planning and Development Council).

Mature firms lead vitality in this MSA, outpacing startup vitality in every summary category and aggregate measure, although in most cases 

not by much. Overall retention rates run 10 percent above the US average; retention among startup firms outperforms above national trends 

by 4 percent. Startup activity, however, runs 16 percent below national patterns. Job vitality measures for retained startups are average, 

although sales vitality is significantly lower. High growth firm concentrations are within 3 percent of the national norm and especially strong in 

the smallest employment class, suggesting strong performance among some newer firms.

Retention rates are strong overall, and the MSA shows only a 0.3 percent rate of out-migration among firms from the 1996 analysis pool. Both 

sales and job vitality rates among retained firms are strong in aggregate. Although retention is relatively weak among wood products firms 

(but not furniture), vitality indicators in both industries are strong, as they are in construction, chemicals, the small rubber/plastics industry and 

to a lesser extent, the industrial machinery industry and transport equipment. Other metalworking segments fall short. Transportation 

industries demonstrate high vitality ratings across the board. Technology services show good ratings in several measures, although job vitality 

among retained communications firms is weak. Retained business services show leading vitality scores, as do health and professional 

support services.

0.86 0.97

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Huntington-Ashland, WV-KY-OH

2001 firms analyzed: 10,084

Startups:

1,079

16.4%

0.84

248 124

121 49% 1.04

380,928 679,048 78.3% 0.64

6 10 67% 1.00

1,375 1,139 83% 1.00

76,186 67,905 -11% 0.49

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,121 138 2.69% 1.17

6,558 50 1.05

7,485 14 0.19%

8,040 2 0.0200% 0.44

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,864 12 0.1500% 0.80

0.72%

0.47

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are weak across the board. Aggregate vitality scores among 121 retained starts are at the US average for job vitality 

measures, although considerably below for average survivor sales change. 

Industry-specific vitality measures among retained startups are impressive in health services, fabricated metals and industrial machinery – but 

the number of retained startups from the 1996 pool in metalworking is so low as to limit the value of industry-specific measures. Among other 

value added industries, only business services had a reasonable number of retained startups to measure – and here vitality ratings were poor.

High growth firm concentrations are significantly above national averages in small employment Classes I and II. Although high growth firm 

concentrations dive precipitously among larger employment classes, the existence of high concentrations of small growth firms is very 

positive in an area with such low startup activity – not enough to compensate for the lag, but helpful.

Aggregate : All Classes 8,040 158 1.97% 0.97
ARC Firm Formation and Retention Analysis 1996-2001

Metro Huntsville, AL

2001 firms analyzed: 13,199

Retention:

10,668 5,340

5,304 50% 0.99

498,025 875,273 75.8% 1.49

13 19 38% 0.92

137,553 97,384 71% 0.92

71,146 109,409 54% 1.05

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.99 1.17

Retained Firms

US = 1.00

The MSA Huntsville area includes Limestone and Madison Counties in AL, part of ARC District 1C, the Top of Alabama Regional Council of 

Governments.

The MSA indicates a fairly strong set of summary vitality scores, including industry-wide retention rates at the US average, very high levels of 

startup activity conditioned by low startup survival, and reasonable concentrations of high growth firms. Emerging firms are clearly the area’s 

strongest group, including its best high growth concentrations. In more than one case, modest industry-wide retention and vitality ratings 

correspond to high startup activity and vitality measures in the same industry, lending an air of evolving growth patterns and healthy churn to 

the MSA economy.

The MSA’s retention rate runs only a point off the US average. While job vitality measures among retained firms are 8 percent below national 

trends, average survivor sales change in this technology-intensive area are far above average. The MSA’s business out-migration rate is a 

low 0.3 percent.

Vitality measures among construction firms are poor, but as noted above, somewhat offset by startup activity and vitality in the same industry. 

Wood products and furniture industries reflect high vitality ratings, as do plastics and most metalworking industries, including primary and 

fabricated metals. Although retention among communications firms is low, growth scores among retained firms are high in both sales and job 

measures. All vitality measures are high across the board among professional services including engineering and research, and sales change 

vitality among retained firms in business (technology) services firms are extremely strong.

1.05 0.96

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Huntsville, AL

2001 firms analyzed: 13,199

Startups:

2,004

22.8%

1.17

583 224

222 38% 0.81

334,034 444,221 33.0% 0.27

5 7 40% 0.60

3,063 1,604 52% 0.63

66,807 74,037 11% 0.54

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

7,202 166 2.30% 1.00

8,979 55 0.85

10,075 35 0.35%

10,679 1 0.0100% 0.17

'96 Firms in Class High Growth 96-01 % High Growth US Index

10,463 11 0.1100% 0.55

0.72%

0.88

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Key technology industries also exhibit leading startup activity rates, including technology driven business and professional services. 

Communications startups lag but not disastrously. High startup activity rates can be found among industries with both small numbers of firms 

(foods, textiles) and those with higher numbers of business operations, including printing, wood, fabricated metals, transport equipment and 

instruments. Trucking startup activity is one-third above average. Possibly as a result of so much emerging activity, financial services startup 

rates are high as well. 

Analysis of retained startup vitality indices are limited by the small number of startups tracked from the 1996 pool. However, those in some 

key industries, including transport equipment and instruments, appear to rate highly. Electronics startups do not do as well. Coupled with low 

vitality among retained electronics firms overall, these trends may suggest a concern in this technology intensive environment. Wholesale 

trade vitality is strong among both longer-term firms and startups. Business and professional startups showed mixed retention and vitality 

rates, reflecting an intensely competitive environment. Technology services startups may look weaker than they are as a result of strong 

competition as well as the five-year tracking method that rules out growth measures from the vast majority of startups in these industries -- 

which began operations between 1997 and 2000.

Concentrations of high growth firms run 4 percent behind national trends. Scores lag in the larger employment classes, but are at US levels 

in Class I, the smallest. While the immediate impact here may be modest, the MSA hosts over 165 high growth small firms, suggesting an 

emerging cycle of vitality which will rely on quality firms among the many startups comprising the area’s entrepreneurial vitality picture.

Aggregate : All Classes 10,679 209 1.96% 0.96
ARC Firm Formation and Retention Analysis 1996-2001

Metro Jamestown, NY

2001 firms analyzed: 6,076

Retention:

5,482 3,134

3,118 57% 1.13

396,956 534,274 34.6% 0.68

10 15 50% 1.20

53,567 44,537 83% 1.08

66,159 76,325 15% 0.73

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.13 0.68

Retained Firms

US = 1.00

The Jamestown MSA is contiguous with Chautauqua County NY, the largest county in ARC District 6A, the Southern Tier West Regional 

Planning and Development Board. The MSA is also adjacent to areas of PA’s Northwest Regional Planning and Development Commission.

Jamestown’s summary vitality ratings fit the pattern of most metros in the NY-PA regions of the Appalachian Region – high retention rates 

among both startup and longer term firms, coupled with low startup activity and modest concentrations of high growth firms. In Jamestown’s 

case, retained firms exhibit high job change vitality rates, although startup vitality is extremely weak. High growth firm rates are good in larger 

employment classes, but the absolute numbers in these categories are extremely small.

Business out-migration rates from this MSA are very low.

Retention vitality ratings in the MSA are strong. At an indexed score of 1.13, aggregate retention rates are substantially above US averages. 

Moreover, both average job change and replenishment rates among retained firms indicate growth among established firms well in excess of 

US norms, although aggregate sales vitality patterns are weak. 

Construction retention is good, although vitality patterns fall behind US norms. Manufacturers in both durable and non-durable industries show 

very good vitality measures, including wood products, furniture, chemicals, plastics, fabricated metals, industrial machinery, electronics and 

instruments. Retention is high among transport modes and services, but all appear to be struggling in all job and sales vitality categories. 

Measures in the non-depository financial services industries are strong. While retention rates in communications are excellent, vitality among 

retained firms is weak except in the job replenishment measure. The same can be said for business and professional services, which include 

technology driven computer service and research industries.

0.73 0.94

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Jamestown, NY

2001 firms analyzed: 6,076

Startups:

566

13.3%

0.68

116 73

71 61% 1.31

657,732 852,459 29.6% 0.24

8 9 13% 0.19

820 617 75% 0.90

82,216 121,780 48% 0.88

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

3,501 79 2.26% 0.98

4,269 28 0.91

4,767 19 0.40%

5,009 2 0.0400% 0.71

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,927 12 0.2400% 1.28

0.72%

1.01

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are sluggish, as they are in throughout the southern NY-northern PA region. Construction industry startups are far below 

average, and surviving construction starts reflect mixed vitality levels. Fabricated metals startups do well in all measures, but the surviving 

starts in the area’s industrial machinery industry appear weak. Startups in other value-added industries (business and professional services, 

etc.) indicate high retention rates, but little else. Identified retained startups are in such small numbers that meaningful industry-specific 

analysis is difficult.

MSA concentrations of high growth firms run about 6 percent behind average. However, Class I (the smallest) is just under par and Classes 

III and IV indicate higher than average concentrations. For now, solid performance in some manufacturing industries and a cadre of small 

high growth firms are taking the place of entrepreneurial vitality in an area that needs all three.

Aggregate : All Classes 5,009 96 1.92% 0.94
ARC Firm Formation and Retention Analysis 1996-2001

Metro Johnson City-Kingsport-Bristol, TN-VA

2001 firms analyzed: 16,553

Retention:

14,119 7,935

7,908 56% 1.11

451,002 661,226 46.6% 0.92

14 16 14% 0.34

184,071 127,038 69% 0.90

75,167 82,653 10% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.11 0.76

Retained Firms

US = 1.00

The Johnson City MSA includes counties from three ARC districts: Carter, Hawkins, Sullivan, Unicoi and Washington TN in ARC 11C, the 

First Tennessee Development District; Scott VA in District 12A, the LENOWISCO Planning District Commission; and Washington VA in ARC 

District 12C, the Mount Rogers Planning District Commission.

Johnson City reflects the familiar pattern of many MSAs linked to the Region, including high retention rates among both the universe of 

businesses and the entrepreneurial community, with low levels of startup activity and lagging concentrations of high growth firms. In this 

case, startup activity rates run almost one-quarter below national averages – significantly lower than the Regional average itself.

The MSA’s high retention rate (11 percent above average) is the best news for retention vitality. Aggregate scores for vitality measures lag US 

patterns by 10 percent and more in aggregate, but in important value added industries, show considerable zip. At 0.2 percent from the 1996 

universe of firms, business out-migration rates are unusually low. 

Significant numbers of specific industries with relatively large facility concentrations also score well in the various retention indices. These 

include agricultural services (174 retained firms), building general contractors and special trades contractors, wood and paper products. The 

MSA’s large metalworking cluster reflects high vitality scores in both fabricated metals and industrial machinery industries, as well as in the 

smaller plastics group. Both motor freight and the smaller water transportation industries, along with transport services, reflect good vitality 

ratings in retention and multiple survivor vitality categories. Technology services indicate high retention and vitality ratings, including other 

business services (including computer related) and the engineering and research segment.

0.80 0.86

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Johnson City-Kingsport-Bristol, TN-VA

2001 firms analyzed: 16,553

Startups:

1,628

14.8%

0.76

413 204

203 49% 1.05

388,235 1,968,681 407.1% 3.34

15 31 107% 1.60

6,052 6,170 102% 1.23

77,647 93,747 21% 0.68

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,340 199 2.13% 0.93

11,705 74 0.87

13,112 42 0.32%

13,974 6 0.0400% 0.77

'96 Firms in Class High Growth 96-01 % High Growth US Index

13,698 25 0.1800% 0.96

0.72%

0.81

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are the MSA’s weak spot, including low scores in several industries which did well in retention vitality ratings – 

construction for example. Startup rates are high in plastics, only 8 percent below average in industrial machinery, and above US trends in the 

fabricated metals group, electronics and instruments (which include only a small absolute number of startups). Communications startup 

activity is low (0.47), and technology-driven business services startups run 28 percent below average. Professional services startup activity is 

low as well.

The performance of aggregated retained startups is impressive. In addition to retention, all vitality measures are well over US averages. 

Average survivor sales growth appears to be distorted by data in the industrial machinery industry, probably due to a merger or takeover. 

Small numbers of surviving startups in communications and a larger number of selected retail and professional services industries drive up 

the survivor vitality indices.

High growth firm concentrations, with an aggregate score of 0.86, are low. The area’s highest ratings are for the smallest firms (Class I) at 7 

percent US averages, and Class IV, those which began the period with fewer than fifty jobs and ended with more than 100 (4 percent below 

US patterns). Larger high growth firm concentrations might be necessary to compensate for the gap created by lagging startups in the 

MSA’s economic vitality outlook.

Aggregate : All Classes 13,974 243 1.74% 0.86
ARC Firm Formation and Retention Analysis 1996-2001

Metro Johnstown, PA

2001 firms analyzed: 8,865

Retention:

7,476 4,429

4,393 59% 1.17

573,144 629,768 9.9% 0.19

11 13 18% 0.44

75,870 58,766 77% 1.01

81,878 78,721 -4% 0.76

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.17 0.65

Retained Firms

US = 1.00

The Johnstown PA MSA is wholly comprised of Cambria and Somerset Counties, both part of ARC District 9F, the Southern Alleghenies 

Planning and Development Commission. Johnstown is one of two metros which is fully within the Commission’s area. (Altoona is the other.)

In fact, Johnstown’s summary vitality ratings are not unlike those in Altoona. Like Altoona, Johnstown indicates very high overall retention 

ratings, both for the general business population and for startup firms. Among the general business population, the concentration of high 

growth firms is not as high as the US average (some 7 percent lower), but better than in the Appalachian Region as a whole. Entrepreneurial 

activity is, however, a serious concern at only 65 percent of the national rate.

While aggregate scores show that retained firms in the area grew over the five-year analysis period, sales and employment changes both 

lagged US patterns significantly. Job replenishment rates were slightly above the US norm, suggesting that larger firms survived and 

experienced some expansion activity. As in most other ARC areas, business out-migration is not a major problem, but it is higher than most in 

most other ARC regions; a little less than 0.5 percent of surviving businesses captured in the 1996 snapshot relocated from the MSA by the 

beginning of 2001.

Vitality indicators included high sales and job ratings in various construction industries. There were multiple strong vitality indicators in several 

manufacturing industries, including non-durables such as food products, apparel, lumber furniture and the small plastics industry, but also in 

heavy durables – primary metals, fabricated metals, industrial machinery and electronics. The communications industry showed little vitality, 

but business services exhibited high levels of vitality in retention, survivor sales and job vitality measures, as did professional support 

services, both legal and engineering.

0.76 0.93

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Johnstown, PA

2001 firms analyzed: 8,865

Startups:

799

12.7%

0.65

163 89

85 52% 1.11

409,023 571,250 39.7% 0.33

8 20 150% 2.25

1,193 1,642 138% 1.65

68,170 57,125 -16% 0.41

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

4,935 110 2.23% 0.97

6,112 48 1.08

6,784 32 0.47%

7,170 5 0.0700% 1.25

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,027 14 0.2000% 1.05

0.72%

1.19

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are by far Johnstown’s weakest link. Aggregate job and sales vitality ratings among retained startups is high, but there 

simply aren’t that many of them. Industry specific analysis of surviving startups is difficult due to small numbers; only 65 surviving startups 

were tracked from the 1996 pool of 163 firms identified as one year old or less. 

While startup activity rates overall are exceedingly low, the MSA’s traditional core metalworking industries experienced startup levels superior 

to national trends. These included almost thirty startup firms in primary metals, fabricated metals and transportation equipment. But that’s the 

end of the good news insofar as startup activity rates are concerned.

Analyzing extremely limited data, some of the same industries appear to have performed well in the analysis of startup survivor vitality 

measures; fabricated metals and industrial machinery stand out. Construction trades contractors and engineering also appear strong in 

retention and job vitality categories.

Like the Altoona MSA, Johnstown has an aggregate concentration of high growth firms which lags US patterns, but by only 7 percent. The 

MSA’s Class II, II, IV and V high growth concentrations are all above average. These high growth firms are serving as the vitality engines for 

the MSA, much as they are in Altoona. Thus, the two metros are currently fulfilling their expected role as centers of economic activity for the 

surrounding ARC district – but the future will be bleaker unless entrepreneurial activity is substantially enhanced.

Aggregate : All Classes 7,170 136 1.90% 0.93
ARC Firm Formation and Retention Analysis 1996-2001

Metro Knoxville, TN

2001 firms analyzed: 30,280

Retention:

22,572 11,921

11,850 53% 1.04

535,373 922,724 72.4% 1.43

14 18 29% 0.69

295,892 207,995 70% 0.91

76,482 102,525 34% 0.99

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.04 1.18

Retained Firms

US = 1.00

The Knoxville MSA includes Anderson, Blount, Knox, Loudon, Sevier and Union Counties in TN, all counties within ARC 11B, the East TN 

Development District.

Only 0.3 percent of more than 22,000 firms tracked from 1996 survived the period and relocated from the area. The MSA’s aggregate 

retention rate was 4 percent above the national average, and the summary startup survival index was right on target at the US level. High 

growth firms were generated at a rate almost exactly tracking national patterns. But the real news is that these average to above average 

scores appear in the context of a startup activity rate 18 percent above national norms, creating a picture of concurrent stability and 

dynamism.

While aggregate job change among retained firms (from the 1996 pool) is somewhat under average, survivor firm sales vitality was far above 

national patterns. And, as discussed in the next section, startup job vitality measures were significantly higher. 

The vitality in value added industries jumps out in the many industries with high retention numbers as well as a handful with less impressive 

showings. Retained construction firms appear to be booming. Manufacturing boasts a string of industries with high sales and job retained firm 

vitality rates: food products, apparel, wood products, furniture, paper, petroleum, plastics, leather, primary metals, electronics, transport 

equipment and instruments. Secondary transportation services show booming vitality measures, as do all segments of the financial sector. 

The communications and business services industries, however, do not rate as highly in sales or job vitality indices, despite good retention 

rates.

0.99 0.99

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Knoxville, TN

2001 firms analyzed: 30,280

Startups:

4,565

23.0%

1.18

850 403

399 47% 1.00

686,842 1,231,549 79.3% 0.65

7 15 114% 1.71

5,972 5,864 98% 1.18

114,474 102,629 -10% 0.75

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

14,272 359 2.52% 1.09

17,945 124 0.95

20,524 71 0.35%

21,972 10 0.0500% 0.81

'96 Firms in Class High Growth 96-01 % High Growth US Index

21,483 43 0.2000% 1.05

0.72%

0.87

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is simply enormous – and widely distributed: more than half again the national average in agricultural services and far above 

national rates in all construction industries. Startup activity rates in fifteen of twenty manufacturing industries top national patterns. Motor 

freight starts run 40 percent above average and transportation services 13 percent. Wholesale industry activity and startups in all financial 

industry segments reflect higher than average patterns, and technology-driven business services startups run above the US index, as do legal 

and engineering and research services. Among major value added industries, only communications appears to be suffering low startup rates, 

and this may be compensated by branch development activity excluded from this measure.

Job vitality among retained starts is extremely high. Change in retained survivor average job patterns is as high as 1.71 on the US index, 

while replenishment rates run 18 percent above average. Startup survivor sales change figures appear considerably lower. Among retained 

startups, the most significant levels of vitality are in agricultural services, where all measures, including retention, sales and job vitality 

indexes, are high; special trade contractors among construction industries; and a series of manufacturers but especially the metalworking and 

technology groups, including industrial machinery, electronics, transport equipment and instruments. Real estate and insurance indicate high 

retention, survivor sales and job vitality measures. Retained startup vitality seems problematic for business services.

Just about average in aggregate, concentrations of high growth firms peak among the small Class I firms (corresponding to high levels of 

startup activity and job vitality) and again in Class IV, where firms pass the threshold of 100 jobs after beginning the analysis period with 

fewer than fifty. The combination of these growth drivers with widespread entrepreneurial energy reflects the MSA’s broadly-based 

dynamism.

Aggregate : All Classes 21,972 441 2.01% 0.99
ARC Firm Formation and Retention Analysis 1996-2001

Metro Lexington, KY

2001 firms analyzed: 19,618

Retention:

16,070 8,773

8,710 54% 1.08

762,031 880,453 15.5% 0.31

13 19 46% 1.11

200,119 165,803 83% 1.08

108,862 97,828 -10% 0.94

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.08 0.91

Retained Firms

US = 1.00

The Lexington KY MSA includes two counties, Clark and Madison, which are also part of ARC District 3C, the Bluegrass Area Development 

District.

The MSA indicates high levels of economic vitality over the five-year period examined, starting with an economy-wide retention rate 8 percent 

above national norms. Startup retention rates are also higher than average, somewhat offsetting entrepreneurial activity levels which lag 

about 9 percent below average. However, the vitality of those new firms, startup survival high growth firm concentrations may offset the 

modest lag in entrepreneurial activity.

The MSA’s retention vitality scores stand out; not only is the retention rate itself admirably high, but vitality of retained firms in aggregate is 

quite good. Lexington leads national margins significantly (8-11 percent) in both job vitality measures. Aggregate sales change vitality among 

retained firms is low, but this seems to be due to steep decreases in transportation equipment; Most major industries did quite well in this 

category. The area lost 63 firms to out-migration during the analysis period, an about-average rate of slightly less than 0.4 percent.

Construction vitality is high in all categories and industries. Not only were retention rates above average in 16 of 19 manufacturing industries, 

but sales vitality rates led the US level in thirteen and job vitality rates were above average in at least a single measure in sixteen industries– 

and above both in twelve. High vitality manufacturers included industrial machinery, fabricated metals, electronics and printing, all among the 

MSA’s largest.

Retention and vitality ratings were also high in motor freight transportation and transport services. Retention rates in communications were 

just below average; sales vitality ratings were good although job vitality lagged among survivors in the industry. Business, legal and 

professional services all indicated high retention and vitality scores.

0.94 1.17

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Lexington, KY

2001 firms analyzed: 19,618

Startups:

2,240

17.7%

0.91

457 230

227 50% 1.06

592,147 1,433,333 142.1% 1.17

7 15 114% 1.71

3,091 3,304 107% 1.28

98,691 110,256 12% 0.80

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

9,248 288 3.11% 1.36

11,796 92 1.08

13,546 63 0.47%

14,599 5 0.0300% 0.61

'96 Firms in Class High Growth 96-01 % High Growth US Index

14,203 32 0.2300% 1.19

0.72%

1.17

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Although startup activity rates lag by 9 percent, the vitality of retained startups over the five-year analysis period is impressive. Startups 

survive at levels about 6 percent above national averages, and increased average sales from the original pool of 1996 entrepreneurs at a rate 

17 percent higher than US norms. Correspondingly, aggregate job vitality among retained starts is very high; the average job change vitality 

score runs 71 percent above the US average for retained startups, while the job replenishment rate is 28 percent higher.

Startups appear to have a difficult time in the construction industries, possibly due to the dynamism of existing firms. Along with high startup 

rates in plastics, fabricated metals and electronics (and average rates in industrial machinery), sales and job vitality of retained startups in 

those industries is extremely strong. The confluence of high vitality among both retained firms and startups in a specific industry is very 

encouraging. The same can be said for motor freight transport and professional services, where strong startup vitality supplemented high 

performance by the industry overall.

Completing the positive outlook for the MSA, high growth concentrations are very strong almost across the board. Lexington’s high growth 

concentrations are lowest in Class V, firms which began the analysis period with fewer than 100 jobs and ended with more than 250. While 

important in job numbers, these firms represent a small fraction of the 347 high growth firms identified in the MSA. All other class scores 

ranged from 17 percent above average to 36 percent above average, with the highest concentrations among the smallest firms – those most 

likely to make up for current entrepreneurial lags.

Aggregate : All Classes 14,599 347 2.38% 1.17
ARC Firm Formation and Retention Analysis 1996-2001

Metro Montgomery, AL

2001 firms analyzed: 11,911

Retention:

9,336 4,359

4,337 46% 0.92

458,615 719,777 57.0% 1.12

10 14 40% 0.96

87,345 61,769 71% 0.92

76,436 79,975 5% 0.77

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.92 0.96

Retained Firms

US = 1.00

MSA Montgomery covers Elmore County AL in ARC District 1H, the Central AL Regional Planning and Development Commission.

The Montgomery MSA’s summary vitality ratings generally lag US patterns by 5 percent-10 percent. Overall retention runs 8 percent below 

average, while startup activity and survival both register at 0.96, a four per cent lag. The MSA shows aggregate concentrations of high 

growth firms 10 percent lower than US norms. While it trails the US, Montgomery’s startup activity rate is among its pieces of vitality news. 

Startup activity is 9 percent higher than in the rest of the Appalachian region. However, the vitality of retained startups is a serious issue.

Aggregate sales vitality among retained firms is significantly higher than the US average, although both job vitality scores trail by 4-8 percent. 

Coupled with low overall retention rates and the relative gap in high growth firms, this is not a particularly encouraging image. 

There are, however, positive signs. Retained firms in construction industries exhibit high retention rates and at least some leading scores in 

the various vitality indices. In addition to some manufacturing industries with smaller numbers of firms, vitality ratings are also high in core 

industries: fabricated metals, industrial machinery, electronics, transport equipment and instruments. (Retention rates themselves are lower in 

electronics and transport.) Retention rates – although not vitality scores – are high in communications. Business and professional service 

industry appear to lag in vitality ratings.

0.77 0.90

0.00

0.20

0.40

0.60

0.80

1.00

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Montgomery, AL

2001 firms analyzed: 11,911

Startups:

1,399

18.6%

0.96

259 116

116 45% 0.96

698,113 999,099 43.1% 0.35

8 9 13% 0.19

2,128 998 47% 0.56

77,568 111,011 43% 0.81

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,805 136 2.34% 1.02

7,451 52 0.96

8,524 23 0.27%

9,135 6 0.0700% 1.17

'96 Firms in Class High Growth 96-01 % High Growth US Index

8,907 14 0.1600% 0.83

0.72%

0.68

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

While startup activity rates lag US margins by 4 percent, they constitute a relative bright spot for Montgomery. However, vitality ratings among 

retained starts appear quite low in aggregate measures. Higher levels of vitality can be discerned among retained startups in various 

industries, but the low absolute number of firms analyze diminishes the value of the data. 

Startup rates are relatively low in construction, and above average in only a handful of manufacturing industries, including food products, 

apparel, paper products, plastics, primary metals, fabricated metals and electronics. Startup activity is strong in all transportation industries 

except air transport. Activity is weak in both communications and business services, although higher than average in several professional 

support industries, including legal, engineering and research, where some vitality measures are strong as well. Sales vitality in business 

services, including computer-related services, is strong among retained startups, unlike the case for retained business services overall.

Despite an aggregate score 10 percent below national levels, the MSA indicates leading concentrations of high growth firms in both Class I 

(the smallest firms, those beginning with fewer than five employees) and Class V (the largest employment class). The area is very weak in 

high concentrations among firms which are most likely to be in their first growth period (Classes III and IV). This generally corresponds to 

the low levels of vitality identified among 5-year old startups, and indicates a potential focus of development work which would enhance 

retention, vitality and high growth concentrations throughout the MSA.

Aggregate : All Classes 9,135 166 1.82% 0.90
ARC Firm Formation and Retention Analysis 1996-2001

Metro New York, NY

2001 firms analyzed: 344,039

Retention:

363,629 172,907

170,487 47% 0.93

678,325 1,204,650 77.6% 1.53

12 18 50% 1.20

4,079,053 3,072,825 75% 0.98

96,904 133,850 38% 1.29

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.93 1.00

Retained Firms

US = 1.00

At its far western edge, the New York NY MSA includes Pike County PA, part ARC District 9D, the Economic Development Council of

Northeastern PA.

Other summary indices suggest mixed vitality patterns: Aggregate retention rates were 7 percent below national levels, and retained startups 

trailed by 3 percent. Startup activity rates were even with US patterns, but the aggregate concentration of high growth firms fell 15 percent 

below. Within those summary statistics, retained firms generally indicated solid aggregate vitality patterns. The combination of high outmigration and good vitality among survivors suggests spillover opportunities for nearby ARC areas.

The MSA indicates considerably higher business out-migration rates than most others: more than 2,000 firms or 0.7 percent of the total from 

the 1996 pool tracked. Fully 1.4 percent of all survivor firms, relocated outside of the MSA by 2001. While the number of migrant firms is the 

same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Retention and retained firm vitality measures were not particularly impressive in the MSA’s construction industries. However, vitality, if not 

always retention rates, were high among a number of substantial MSA industries which are also often well-suited to conditions in rural areas: 

textiles and apparel, wood and paper products, leather products, electronics and instruments (which has located in rural settings less 

frequently than the others). Between them, these high vitality industries support over 9,000 firms in the MSA.

While it seems less likely that service industries in the core urban sections of the New York MSA are likely to relocate or expand into rural 

areas, communications and business services, including their technology segments, rated high in vitality measures (a mix of sales and job 

categories), as did support services in legal, engineering and research.

1.29 0.85

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro New York, NY

2001 firms analyzed: 344,039

Startups:

44,783

19.5%

1.00

12,324 5,710

5,583 45% 0.97

731,267 1,698,803 132.3% 1.09

8 14 75% 1.13

94,119 77,626 82% 0.99

121,878 169,880 39% 1.23

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

222,800 4,307 1.93% 0.84

266,786 1,689 0.87

297,741 1,073 0.36%

315,140 185 0.0600% 1.05

'96 Firms in Class High Growth 96-01 % High Growth US Index

309,078 591 0.1900% 1.01

0.72%

0.91

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Aggregate startup activity rates in the MSA were even with national levels, although the rate of retained startups was 3 percent below 

average. Retained startups from 1996 outpaced national vitality patterns in both average sales change and average job change categories, 

and lagged job replenishment measures by only 2 percent. Startup rates were very high in construction, where smaller special trades 

contractor startups indicated high vitality, but other construction startups followed more modest patterns of the sector overall. 

Startup activity was low in almost every manufacturing industry. Apparel was a notable exception, and despite a startup activity rate 10 

percent below average, industrial machinery starts (often well-suited for rural areas) were retained at a high rate and showed extremely well in 

vitality categories. Communications industry startup activity, including telecommunications, was 20 percent above national averages, as were 

startups in air transportation, although the spillover potential to Pike County are quite limited. Interesting for outlying rural ARC areas, wood 

products startup activity was only 1 percent below national rates, and vitality among retained wood products startups was excellent in all sales 

and job vitality measures.

The New York MSA is strongest in high growth firm concentrations at its upper levels, in Classes IV and V, where the MSA led US rates by 

up to 5 percent. Smaller firms, probably including most startups, did not do nearly as well, with the smallest (Class I) firms achieving high 

growth patterns at only 84 percent of the national rate, despite solid overall showings among retained startup firms.

Aggregate : All Classes 315,140 5,461 1.73% 0.85
ARC Firm Formation and Retention Analysis 1996-2001

Metro Parkersburg-Marietta, WV-OH

2001 firms analyzed: 5,754

Retention:

4,788 2,677

2,644 55% 1.10

506,952 751,187 48.2% 0.95

13 18 38% 0.92

59,401 46,843 79% 1.02

63,369 83,465 32% 0.80

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.10 0.81

Retained Firms

US = 1.00

The Parkersburg MSA includes Wood County in West Virginia’s ARC District 13E, the Mid-Ohio Valley Regional Council. Washington County 

OH, in District 8B, administered by the Buckeye Hills-Hocking Valley Regional Development District, also falls within the MSA.

While Parkersburg’s aggregate retention index is high (10 percent above national levels), other summary measures are modest at best. 

Startup retention is average, but startup activity rates lag national patterns by almost 20 percent. Concentrations of high growth firms top 

ARC regional levels overall, but are still 9 percent behind national averages. Vitality indices struggle to keep up with national rates, and are 

only sporadically successful among longer-term firms. The MSA lags US averages in all aggregate vitality measures for retained startup 

firms.

The MSA’s aggregate retention index (1.10) provides a solid basis for area stability, but vitality indices suggest that retained MSA firms are 

lagging national patterns. Average retained firm sales and job change measures run up to 8 percent below average, although the job 

replenishment rates is above average by 2 percent. 0.7 percent of all firms from the 1996 pool relocated out of the MSA by 2001, an outmigration rate equal to 1.2 percent of all surviving firms, a relatively high rate. While the number of migrant firms is the same in both 

calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Retention rates were high among construction industries, and sales and job vitality rates led national patterns among general contractors. A 

number of manufacturing industries reflected good retention and high sales and job change rates, including wood products, plastics and stoneclay-glass. (Retention rates in the wood products industry were low.) Retention rates were high in technology related services 

(communications and business); communications job replenishment scores led national trends although other vitality measures in this and 

other technology-driven services lagged.

0.80 0.91

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Parkersburg-Marietta, WV-OH

2001 firms analyzed: 5,754

Startups:

610

15.7%

0.81

118 56

55 47% 1.00

1,141,176 2,260,784 98.1% 0.80

12 19 58% 0.88

1,369 1,039 76% 0.91

103,743 113,039 9% 0.82

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,814 65 2.31% 1.01

3,650 23 0.87

4,199 12 0.29%

4,536 2 0.0400% 0.79

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,418 8 0.1800% 0.95

0.72%

0.72

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity in the MSA is significantly below average. Activity rates are below par in almost every major industry, although fabricated 

metals and motor transport rate highly. Communications startup rates are 20 percent below US trends, and in technology-driven business 

services are only 75 percent of the national level. Professional services also indicate low activity rates. Among value added industries, the tiny 

handful of retained startups in motor freight transport and engineering show almost the only positive sales and job vitality measures. The very 

low number of retained startups (55) makes meaningful analysis of retained startup firms – in aggregate or by industry – difficult.

The aggregate concentration of high growth firms is only 9 percent below the US average. The only leading job class for high growth firms is 

the smallest, Class I, which runs 1% ahead of national levels. All other classes are below average, all but the limited Class IV (including 

firms began with fewer than 50 jobs and ended with more than 100) by significant margins.

Aggregate : All Classes 4,536 84 1.85% 0.91
ARC Firm Formation and Retention Analysis 1996-2001

Metro Pittsburgh, PA

2001 firms analyzed: 94,903

Retention:

87,324 49,258

49,069 56% 1.12

555,994 1,031,707 85.6% 1.69

12 17 42% 1.00

993,689 845,998 85% 1.11

92,666 114,634 24% 1.10

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.12 0.75

Retained Firms

US = 1.00

Metropolitan Pittsburgh covers six of the nine counties in ARC District 9H, the Southwestern PA regional Development Council, including 

Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland Counties.

Vitality indices throughout the MSA are quite strong, with the exception of entrepreneurial startup activity. Retention is at an impressive12 

percent above national trends, while startup retention is only a point lower. High growth firm concentrations are on a par with national 

averages, and higher in several employment classes. Vitality measures among retained firms and retained startups alike are high. Startup 

vitality is seriously mitigated by the dearth of entrepreneurial activity, which is fully one-quarter below national trends. Differences between 

the MSA summary scores and those of ARC 9H are mainly focused on startup activity rates, which are even lower in the three LDD counties 

not covered by the MSA.

Business out-migration from the MSA is only 0.2 percent of firms from the original 1996 pool tracked for the analysis, and only 0.4 percent of 

all surviving firms. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the 

number of area firms that ceased operations in the interim.

Retention rates are an impressive 12 percent above average – and more impressive because they are coupled with strong growth ratings in 

all sales and job vitality categories. Construction indices indicate continuing vitality among retained firms in industry groups throughout this 

sector. Retention rates are below average in only one small industry (leather products) and significantly higher in many others. Vitality 

measures indicate leading experience in sales change, job change and replenishment in several important manufacturing industries, including 

the needle trades (both textiles and apparel), furniture, printing, chemicals, plastics, and stone-clay-glass. Metalworking shows sales and job 

vitality among retained firms in primary metals, industrial machinery, electronics and transport equipment. Retained firms in the large 

fabricated metals industry appear weaker in all measures. Retained firms in all transport modes and services except rail indicate leading 

vitality growth rates. 

Value added services are also strong. Communications industry retention is 4 percent below average, but job vitality – both average job 

change and replenishment – are strong. Likewise, technology-driven business services reflect high scores in retention (1.18) and job 

replenishment measures in particular. Support services – research, engineering and legal – also demonstrate strong vitality measures.

1.10 1.00

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Pittsburgh, PA

2001 firms analyzed: 94,903

Startups:

9,376

14.6%

0.75

2,387 1,254

1,239 52% 1.11

610,816 1,109,485 81.6% 0.67

8 14 75% 1.13

17,734 17,073 96% 1.16

101,803 110,949 9% 0.81

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

54,591 1,334 2.44% 1.06

67,503 504 1.03

76,047 289 0.38%

81,135 51 0.0600% 1.12

'96 Firms in Class High Growth 96-01 % High Growth US Index

79,323 182 0.2300% 1.21

0.72%

0.96

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is as weak as retention vitality is strong. Startup activity rates in construction are very low, and among significant 

manufacturing industries, only primary metals and transportation equipment evidence leading startup activity. Other manufacturing startups 

generally lag far behind national trends for their industry. Communications startup activity is only 3 percent lower than the national average, 

but business services, including computer related, show startups at an even lower rate than the MSA average of 0.75. No other significant 

industries in the MSA reflect startup activity rates approaching the national level.

Where there are startups, they survive at higher than average levels and do quite well in the vitality indices. While aggregate sales change 

figures among surviving startups are very low, job vitality – average firm employment change and job replenishment – are significantly better 

than national norms. Retained startup vitality is evident among special trades contractors, food products, wood products and furniture, 

chemicals and stone-clay-glass. Retained startups in primary metals, industrial machinery and transportation equipment – 43 of them from 

the 1996 group traced – lead national patterns for both sales and job vitality measures. Transportation startups did extremely well. Retention 

rates (although not vitality measures) were high in communications, and business services operated at or near national levels for all vitality 

patterns. Some financial industries, especially brokerages, indicated high vitality measures, as did engineering and research.

High growth firm concentrations are at or above national levels in all categories except Class III (firms beginning with fewer than 25 jobs and 

ending with more than 50), which runs only 4 percent behind. The MSA’s high growth firm concentrations are particularly strong in the larger 

employment classes, Class IV and V, where the MSA’s advantage goes as high as 21 percent.

Aggregate : All Classes 81,135 1,648 2.03% 1.00
ARC Firm Formation and Retention Analysis 1996-2001

Metro Roanoke, VA

2001 firms analyzed: 10,302

Retention:

8,539 4,442

4,399 52% 1.02

442,447 650,077 46.9% 0.93

12 16 33% 0.80

99,425 71,476 72% 0.93

73,741 81,260 10% 0.78

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.02 0.84

Retained Firms

US = 1.00

The Roanoke MSA includes a single ARC county, Botetourt in ARC District 12E of Virginia’s Fifth Planning District Commission.

With the exception of startup activity, which registers 16 percent below US levels and below ARC regional averages, the Roanoke MSA 

supports summary vitality scores which are right on the money. Aggregate retention rates are 2 percent above average, and startup retention 

bests national rates by 7 percent. Concentrations of all high growth firms are right at national levels. Aggregate vitality scores are high for 

retained startups in both job vitality categories, while corresponding vitality scores are consistently below average for retained firms.

The MSA’s out-migration rate is 0.5 percent of firms from the 1996 universe analyzed, and 1.0 percent of the survivors, casting a minor pall 

on the better than average retention rate. While the number of migrant firms is the same in both calculations, the pool of firms to which it is 

compared differs by the number of area firms that ceased operations in the interim. At the same time, vitality indices for retained firms are 

below average across the board, ranging from 80 percent of the national rate in the survivor job change category to 93 percent in sales 

change and job replenishment. 

Heavy construction firms evidence high retention rates and excellent vitality across the board. And while most manufacturing industries also 

register below average vitality ratings, a few stand out as high performers, including plastics, fabricated metals, instruments, miscellaneous 

manufacturing and electronics (high vitality despite very low retention levels in this last). Retention rates are high in the large trucking industry, 

as are job replenishment measures. Communications and business services appear to have weak vitality among retained firms – and

retention rates almost 10 percent below the national average – but the insurance industry shows high vitality ratings in an otherwise modest 

performance in the FIRE sector.

0.78 1.00

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Roanoke, VA

2001 firms analyzed: 10,302

Startups:

1,052

16.4%

0.84

220 115

110 50% 1.07

755,914 1,107,609 46.5% 0.38

10 18 80% 1.20

2,053 1,963 96% 1.15

107,988 100,692 -7% 0.73

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

5,110 127 2.49% 1.08

6,581 54 1.13

7,514 37 0.49%

8,090 4 0.0500% 0.88

'96 Firms in Class High Growth 96-01 % High Growth US Index

7,892 16 0.2000% 1.07

0.72%

1.24

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Low startup rates are pervasive. Among value-added industries, only three -- lumber, paper and fabricated metals – indicate startup activity 

rates higher than the national average for the industry. (The number of firms involved is small.) Motor freight’s low startup rates are no doubt 

influenced by a crowded local playing field and a high vitality set of retained players. Startup rates in FIRE and value added services are low.

The small number of retained startups from the 1996 pool (110) makes industry-specific analysis difficult. However, it is clear from the 

aggregate numbers that although the solid level of retained startups (7 percent above average) had difficultly moving into higher sales 

patterns, this may have been due to industry mix more than vitality, since job vitality measures are quite good; Retained startup average job 

change and job replenishment are 15 percent and 20 percent above average respectively. Two of the few industries with enough retained 

starts to analyze in any meaningful way showed solid vitality ratings – special trade contractors and miscellaneous retail. But another, 

business services, did poorly.

Despite relatively modest retention vitality ratings, the MSA supports a good number of high growth firms. Aggregate concentrations are only 

average, but four of five classes (Classes I-IV) reflect concentrations above national levels by as much as 24 percent. These economic 

engine firms will continue to generate growth in Roanoke, but the area’s stability would be significantly aided by enhanced entrepreneurial 

performance.

Aggregate : All Classes 8,090 164 2.03% 1.00
ARC Firm Formation and Retention Analysis 1996-2001

Metro Scranton-Wilkes-Barre-Hazleton, PA

2001 firms analyzed: 26,183

Retention:

24,556 14,199

14,135 58% 1.14

466,007 726,666 55.9% 1.10

12 15 25% 0.60

275,493 206,322 75% 0.97

77,668 90,833 17% 0.87

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.14 0.71

Retained Firms

US = 1.00

The Scranton MSA includes Pennsylvania counties in three different ARC districts: Wyoming County in District 9C, the Northern Tier 

Regional Planning and Development Commission; Lackawanna and Luzerne Counties in PA District 9D, the Economic Development Council 

of Northeastern PA; and Columbia County in PA District 9G, the SEDA Council of Governments. The MSA is totally within the Appalachian 

region.

Summary vitality rates mirror the most common pattern for northeastern ARC MSAs – high overall retention rates (coupled with good vitality 

among retained firms), high retention rates for startup firms, and very low levels of startup activity. Many such areas demonstrate average to 

high concentrations of high growth firms, but the Scranton MSA does not; high growth rates in aggregate fall 30 percent below US averages. 

Nonetheless solid vitality measures among surviving firms suggests a reservoir of strength that will be complemented by new branch 

attraction not included in these measures.

The MSA’s overall retention index is 14 percent above national levels, and business out-migration appears quite low – only 0.3 percent of 

firms from the original pool and 0.5 percent of all survivors. While the number of migrant firms is the same in both calculations, the pool of 

firms to which it is compared differs by the number of area firms that ceased operations in the interim. Sales vitality is high overall and job 

replenishment figures are just below national averages. 

Sales per employee measures are high in a number of value added industries, including furniture, plastics, stone-clay-glass, primary metals, 

electronics and transport equipment. Communications sales per employee levels are only 11 percent below national levels – high for most 

Regional MSAs. In selected industries, vitality indices are positive in multiple categories. These include paper goods, chemicals, plastics, 

petroleum, primary metals, electronics and transport equipment.

0.87 0.70

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Scranton-Wilkes-Barre-Hazleton, PA

2001 firms analyzed: 26,183

Startups:

2,437

13.8%

0.71

605 328

323 53% 1.14

665,447 748,772 12.5% 0.10

10 9 -10% 0.00

5,614 2,921 52% 0.63

83,181 106,967 29% 0.78

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

15,545 273 1.76% 0.76

18,852 86 0.63

21,082 62 0.29%

22,415 7 0.0300% 0.56

'96 Firms in Class High Growth 96-01 % High Growth US Index

21,918 25 0.1100% 0.60

0.72%

0.74

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates average 29 percent below national levels. Textiles, fabricated metals and industrial machinery all indicate above average 

startup activity rates, and electronics startups are only 5 percent below average. The financial sector reflects hi startup activity in more than 

one segment, as do legal services. But communications, business services and other value-added industries bear the brunt of low level 

entrepreneurial activity in this ARC MSA. 

Although low in aggregate, startup vitality measures show hopeful signs in specific industries. Like construction vitality overall, retained 

startups in the general contracting industry indicate high growth patterns. The FIRE sector shows high vitality among retained startups. 

Perhaps most importantly, the technology-driven business services industry not only experienced a level of startup retention more than 80 

percent above the national average. This was coupled with high job change rates among surviving startups in an area which, as in many ARC 

districts, business and technology service gaps are large.

High growth concentrations in the MSA are low across the board, ranging from 0.56 among the largest class of firms, Class V, to no higher 

than 0.76, or 24 percent below average, among firms which began the measurement period with fewer than five jobs and grew to at least 10 

by the end of 2000.

Aggregate : All Classes 22,415 319 1.42% 0.70
ARC Firm Formation and Retention Analysis 1996-2001

Metro Sharon, PA

2001 firms analyzed: 4,985

Retention:

4,032 2,462

2,441 61% 1.20

525,117 781,702 48.9% 0.96

11 15 36% 0.87

41,026 36,399 89% 1.15

75,017 86,856 16% 0.84

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.20 0.75

Retained Firms

US = 1.00

The Sharon MSA is contiguous with Mercer County, PA, which is also within the eight county ARC District 9A, the Northwest PA Regional 

Planning and Development Commission. Sharon is one of two MSAs (Erie is the other) encompassed by the District.

Spurred by a combination of industrial and retail growth, the well-located Sharon MSA indicates high summary vitality scores in every 

category except entrepreneurial activity. Overall retention rates are 20 percent above national levels, backed by some strong retained firm 

vitality indices. Startup retention rates are even higher, and the concentration of high growth firms in this small MSA is more than one-quarter 

greater than the national level.

About 0.5 percent of Sharon firms from the original 1996 pool relocated outside the one county MSA by the beginning of 2001 – 0.9 percent of 

the survivors. (While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the 

number of area firms that ceased operations in the interim.) This is a relatively high proportion, but not wholly unusual for a MSA limited to a 

single county area. Out-migration is also not a major concern in light of other vitality ratings, unless it were to be concentrated among young 

firms.

Survivor sales change rates lag US patterns mildly, but job replenishment scores suggest that this may not be a major concern. Job 

replenishment rates in aggregate run 15 percent above average, suggesting retention of larger firms and expansions across industries and 

size categories, a notion supported by the area’s high growth firm concentrations. Aggregate sales per employee levels among retained firms 

are still about 16 percent below average.

Retained construction industry firms clearly boomed over the analysis period, showing leading retention and vitality indices across the board 

(but lower in the sales per employee ratings). Major industry strengths included core area manufacturers: food products, wood products and a 

series of metalworking industries – primary metals, fabricated metals, industrial machinery and electronics. Retained firms in some minor 

industries – e.g., chemicals and plastics – also performed well in vitality indices. Sales per employee positioning remained relatively low 

among survivors in most industries – but led in primary and fabricated metals.

The area’s small number of communications firms also did well in retention and vitality indices. (Startup rates in communications reach 

average levels due to the small number of existing firms.) Likewise, technology-driven business services indicate high retention and sales 

vitality ratings among retained firms. Sales per employee are particularly high, suggesting good competitive positioning.

Retained retail industries (which in this rural collector MSA often bring in outside dollars) indicate high retention patterns across the board, 

and leading vitality measures, especially employment vitality, in many.

0.84 1.27

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Sharon, PA

2001 firms analyzed: 4,985

Startups:

492

14.6%

0.75

94 59

58 62% 1.32

501,250 1,943,636 287.8% 2.36

5 10 100% 1.50

463 564 122% 1.46

100,250 194,364 94% 1.41

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,549 79 3.10% 1.35

3,163 23 1.00

3,510 16 0.46%

3,720 1 0.0300% 0.48

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,643 11 0.3000% 1.59

0.72%

1.15

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

The MSA’s weak link is clearly entrepreneurial activity. The startup rate is only 75 percent of the national average, and well below ARC 

average rates as well. The demand for, and vitality of, startup firms is evident. Startup retention rates are 32 percent above average, and 

retained startups (only 58 could be traced from the 1996 pool) evidence leading indicators in every vitality index: sales vitality, employment 

change and job replenishment, Retained startup sales per employee rates are more than 40 percent above the national average, capping an 

impressive showing.

Startup activity is unfortunately low in most industries, but quite strong in core manufacturing groups, including leading rates in primary 

metals, fabricated metals, industrial machinery, electronics and transport equipment. Reflecting the MSA’s transportation infrastructure and 

increasing use as a retail destination point for surrounding areas, the lodging industry also shows startups at a higher than average rate. 

Business service and communications startup activity lags national levels slightly, but are significantly higher than the average rate in the 

MSA.

The MSA indicates concentrations of high growth firms at or in excess of the US average in all employment classes analyzed except the 

largest, Class V. Aggregate concentrations are 27 percent above average. This is a very positive indicator, although a high number of these 

firms are likely to be retail branch facilities lured by the development of commercial activity. Nevertheless the significant concentrations of 

small, high growth firms are likely to be relatively young and thus for the time being mitigate the area’s poor entrepreneurial activity 

performance. Coupled with very positive retention and vitality rates among value added industries, the vitality outlook for this MSA, and the 

opportunity to spread benefits to other areas of the ARC District, are quite good.

Aggregate : All Classes 3,720 96 2.58% 1.27
ARC Firm Formation and Retention Analysis 1996-2001

Metro State College, PA

2001 firms analyzed: 5,193

Retention:

3,830 2,303

2,285 60% 1.18

459,641 731,183 59.1% 1.17

17 24 41% 0.99

61,341 55,037 90% 1.17

76,607 73,118 -5% 0.70

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.18 0.76

Retained Firms

US = 1.00

The State College MSA is contiguous with Centre County PA, fully encompassed by ARC District 9G, the SEDA Council of Governments. 

Three other counties in the SEDA COG district comprise part or all of three other MSAs.

As is the case in every PA MSA that includes ARC counties, entrepreneurial activity in the State college MSA lags US patterns overall, 

despite leading rates in a smattering of industries. Vitality rates among retained startups – and the startup retention rate itself – are excellent. 

The area also boasts a concentration of high growth firms some 10 percent higher than the US average, focused largely among smaller firms.

Overall retention rates run 18 percent above the national average. Over the five year period reviewed, only eighteen firms were identified as 

out-migrants from the 1996 pool, a 0.5 percent rate and 0.8 percent among surviving firms – not a troublesome level for a single county MSA. 

While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area 

firms that ceased operations in the interim. Aggregate sales and job vitality measures among retained firms are quite high, rating 17 percent 

above national patterns for both sales change vitality and job replenishment. Aggregate sales per employee levels are considerably lower 

than in the Appalachian region overall.

The area’s small manufacturing sector indicated at least some high vitality ratings among about two-thirds of its manufacturing industry 

groups. Wood products and furniture both did well, showing high indices in all categories. Retained firms in chemicals and metalworking 

industries also did well. Although fabricated metals retention rates were below par, retained firms scored high on sales and job vitality indices, 

Retention and multiple vitality rates among retained firms were also excellent in industrial machinery, instruments and miscellaneous 

manufacturing. Electronics indicates outstanding retention and sales vitality rates. In most heavy industries, sales per employee positioning 

among retained firms are approaching US levels.

Retention and job vitality among retained firms in technology based services – communications and business services – are high, although 

sales vitality and sales per employee appear to lag. Health and professional support services, both legal and engineering-research, also 

indicate high vitality factors in multiple categories.

0.70 1.10

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro State College, PA

2001 firms analyzed: 5,193

Startups:

504

14.9%

0.76

78 49

48 62% 1.32

446,875 1,602,222 258.5% 2.12

6 16 167% 2.50

458 772 169% 2.03

74,479 100,139 34% 0.73

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,230 61 2.74% 1.19

2,868 29 1.40

3,295 14 0.42%

3,531 2 0.0600% 1.01

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,443 4 0.1200% 0.61

0.72%

1.07

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity in plastics and electronics are strong. High levels of entrepreneurial activity in wholesale durables likely reflect the vitality of 

core manufacturing groups, and activity in engineering-research almost reaches average levels. But all other startup activity lags seriously, 

including in the technology-driven communications and businesses services industries.

As is the case in some other ARC-based metros, the low level of startup activity contrasts sharply to the experience of area entrepreneurs. In 

State College, startups survived the five-year analysis period at a rate 32 percent above the US average. Startup retention and vitality indices 

were excellent in some technology-based industries, including electronics and engineering-research. However, business services retention 

was weak, as were both sales and job change measures among the small number of business services firms. Sales per employee levels 

among retained electronics starts are about 5 percent below average – but significantly better than average in engineering-research. Retained 

business service startups also indicate high sales per employee levels.

The area’s high growth index is 10 percent above US levels in the aggregate rate. The highest concentrations of high growth firms are in the 

smaller employment classes (Classes I, II and III), indicating that the area’s younger firms may be developing into its economic engines. 

The dearth of startup activity is an anomaly that could be rectified with ongoing development efforts in this university center.

Aggregate : All Classes 3,531 79 2.24% 1.10
ARC Firm Formation and Retention Analysis 1996-2001

Metro Steubenville-Weirton, OH-WV

2001 firms analyzed: 4,245

Retention:

3,725 2,141

2,118 57% 1.13

539,888 715,803 32.6% 0.64

13 16 38% 0.92

46,653 36,788 79% 1.02

77,127 89,475 16% 0.86

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.13 0.67

Retained Firms

US = 1.00

The Steubenville-Weirton MSA includes three ARC counties in two different districts: Jefferson OH in District 8C, the Ohio Mid-Eastern 

Government Association, and both Brooke and Hancock Counties in ARC District 13K, comprising the whole of the B-H-J Metropolitan 

Planning Commission.

This is an area with indices indicates low vitality patterns seen in a number of other northern ARC-based MSAs. The area’s summary 

retention rate is high (1.13), and is coupled with low startup activity – in this case a full one-third below national levels. High growth 

concentrations are also low (14 percent below average). And perhaps most tellingly, startup retention rates lag US patterns by 20 percent. 

Aggregate vitality rates among all retained firms and retained startups alike are also quite low.

While the MSA and thus, the business out-migration sample are small, the levels of out-migration appear troublesome. 0.6 percent of all firms 

from the 1996 pool and 1.1 percent of all survivors relocated outside the MSA between 1996 and the beginning of 2001 – a relatively high 

rate. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared differs by the number of 

area firms that ceased operations in the interim. 

Retained firms in the MSA indicated sales vitality patterns significantly under par. Job vitality was better, and replenishment slightly above, US 

averages. Among retained firms, sales per employee rates remained low in aggregate, suggesting lagging competitive position. Vitality ratings 

among building contractors were high, a positive indicator of local development, but vitality measures among manufacturing industries were 

quite mixed. As in many other ARC areas, wood products indicated high vitality indices. Chemicals evidenced high sales vitality among 

retained firms, and a high sales per employee index – but low job vitality scores. Retention rates were low in fabricated metals, but high in 

sales vitality and job replenishment indices. Sales per employee were only slightly below national levels. Industrial machinery retention and 

vitality measures were high across the board. Retained motor freight firms indicated high job vitality measures and leading retention rates. 

Sales vitality rates among retained communications firms were excellent, but retention was slightly below average and job vitality quite low. 

Sales per employee indices were very low, suggesting that the sales vitality measures were more catch-up than leading. Technology-driven 

business services measures were high in both retention and job change categories, but low sales and sales per employee rates raise 

concerns about the industry, especially in light of low startup activity rates discussed below.

0.86 0.86

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Steubenville-Weirton, OH-WV

2001 firms analyzed: 4,245

Startups:

364

13.1%

0.67

67 26

25 37% 0.80

238,095 382,609 60.7% 0.50

5 6 20% 0.30

321 144 45% 0.54

47,619 63,768 34% 0.46

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,196 47 2.14% 0.93

2,811 18 0.88

3,174 9 0.28%

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,331 5 0.1500% 0.79

0.72%

0.72

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are very low in almost every major industry and only 67 percent of the US average in aggregate. While rates among 

some manufacturing industries are above average, the number of firms involved makes it difficult to lend this much weight. With the exception 

of fabricated metals, startup activity in almost every value added manufacturing and service industry appears low.

Startup retention rates are low. Only 25 retained startups from the 1996 pool (already small) could be identified, making industry-specific 

analysis difficult. It is nevertheless worth noting that inconclusive data showed at least some high vitality rates among the handful of retained 

startups in construction, motor freight and communications. In aggregate, retained startups did not do well, indicating vitality ratings much 

lower than average in every category – sales change, the two job vitality measures and sales per employee.

The MSA’s aggregate high growth firm concentration was 14 percent below average, ranging from a high score of 0.93 (7 percent below US 

patterns) in the smallest employment Class I, down to 0.72 in Class III. No high growth firms were identified in the largest analyzed 

employment class, Class V.

Aggregate : All Classes 59 1.74% 0.86
ARC Firm Formation and Retention Analysis 1996-2001

Metro Tuscaloosa, AL

2001 firms analyzed: 5,730

Retention:

4,634 2,362

2,346 51% 1.01

514,913 951,905 84.9% 1.67

14 23 71% 1.71

61,527 54,779 89% 1.16

73,559 105,767 44% 1.02

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.01 1.07

Retained Firms

US = 1.00

The Tuscaloosa MSA includes Tuscaloosa County, AL, one of six counties in ARC District 1D, the West Alabama Planning and Development 

Council.

The MSA has enviably solid summary vitality ratings across the board. Both overall retention and startup retention rates are very close to 

national averages, while levels of entrepreneurial activity (1.07) and concentrations of high growth firms of all ages (1.06) are significantly 

above national levels. Most aggregate vitality ratings for retained firms and retained startups alike lead US indices.

At 1 percent above the US average, aggregate retention rates in this MSA are not a concern. Business out-migration rates were a low 0.3 

percent from the 1996 pool of firms tracked, and 0.7 percent of identified survivors. While the number of migrant firms is the same in both 

calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in the interim.

Aggregate vitality growth measures are very strong across the board, including scores of 1.67 in sales change vitality among retained firms, 

1.71 job change vitality and a job replenishment rating 16 percent above average. The measures indicate good expansion activity, and the 

retention and growth of larger as well as smaller firms.

Retention and vitality among retained firms appear very strong in agricultural services, although sales per employee remain lower than US 

averages. Construction also indicates high retention and vitality in selected measures. Performance is mixed among many manufacturing 

industries, with several reflecting modest retention rates (and a small number of firms) but high sales or job vitality indicators among retained 

firms in the industry; these include food products, fabricated metals and instruments. Others (still small numbers of firms) suggest leading 

retention coupled with one or two high vitality measures, including electronics, industrial machinery and primary metals (these are standout 

industry performances), stone-clay-glass and printing.

Among value added services, technology-driven communications and business services indicate relatively low vitality measures, but health 

and legal services are quite strong in both retention and vitality ratings.

1.02 1.06

0.96

0.98

1.00

1.02

1.04

1.06

1.08

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Tuscaloosa, AL

2001 firms analyzed: 5,730

Startups:

757

20.9%

1.07

140 66

64 46% 0.98

490,984 683,333 39.2% 0.32

6 11 83% 1.25

802 702 88% 1.05

81,831 75,926 -7% 0.55

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,309 69 2.99% 1.30

3,109 20 0.89

3,638 13 0.36%

3,957 3 0.0800% 1.35

'96 Firms in Class High Growth 96-01 % High Growth US Index

3,848 9 0.2300% 1.23

0.72%

0.90

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is 7 percent above the US, and 20 index points above the Appalachian regional level. Startup rates are strong in construction. 

Startup activity is weaker among most manufacturers, but higher rates in the technology-oriented instruments industry and within the MSA’s 

small base of plastics firms. Startup activity in business services (including computer-related) and professional support services are high. 

While vitality ratings among retained startups are not as high as within the general business population, they are nonetheless quite solid. 

Startup retention dips below national averages by 2 percent. Aggregate sales vitality among retained startups is quite low, as is the retained 

startup sales per employee rate, both of which could be significantly affected by industry mix. However, both job vitality ratings are high 

among retained startup firms in aggregate. 

Due to the scale of the MSA and the small number of retained startups, industry breakdowns of vitality measures are of limited value. 

However, retained startups in all three construction industries appear to have had a difficult time generating high vitality ratings. Retained 

startups in printing, plastics and industrial machinery developed at least some high vitality measures in both sales and job categories. 

Retention among motor freight startups was poor – but job change ratings led national patterns among those which did survive. However, 

retained startups appear to have achieved their best vitality ratings among personal service and retail firms.

The MSA has higher than average concentrations of high growth firms in both small and large employment classes (Classes I, IV and V). 

Unlike ARC metros which rely on current high growth concentrations for future vitality, high growth firms appear to act as a supplement here 

to solid retention indices and leading rates of entrepreneurial activity.

Aggregate : All Classes 3,957 85 2.15% 1.06
ARC Firm Formation and Retention Analysis 1996-2001

Metro Washington, DC-MD-VA-WV

2001 firms analyzed: 211,379

Retention:

175,066 75,772

75,053 43% 0.85

655,145 1,164,768 77.8% 1.53

13 21 62% 1.48

2,090,577 1,542,575 74% 0.96

93,592 105,888 13% 1.02

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

0.85 1.05

Retained Firms

US = 1.00

The Washington DC MSA includes Berkeley and Jefferson Counties in West Virginia, both part of ARC District 13I, the Region 9 Eastern 

Panhandle Regional Planning and Development Council.

The Washington MSA is one which has already spread its technology influence to outlying counties, a dynamic whose influence is almost 

certain to expand still further to currently outlying areas of the MSA. The MSA’s low overall retention scores, including low startup retention, 

are conditioned by two factors: First, the higher failure rates and churn cycles among technology intensive industries and areas, particularly 

communications and technology-based services; and second, the relatively new nature of explosive entrepreneurial and branch growth in the 

area, much of it since 1996. This recent growth is not captured in the analysis of the pool of firms which existed in 1996 -- and for which 

retention measures were analyzed.

The area indicates high levels of summary startup vitality, 5 percent above US average and ranging much higher in selected industries. 

The MSA’s low overall retention rate (0.85) is offset by a series of leading vitality scores. Retained firm sales vitality runs 53 percent above 

average in aggregate, and average job vitality 48 percent above average. The aggregate sales per employee rate is 1.02. As is the case in 

many large and disparate metros, vitality rates undoubtedly vary widely among more and less developed areas.

The business out-migration rate from the MSA is 0.4 percent from the pool of 1996 firms tracked, and 0.9 percent among the group of 

survivor firms. This rate is considerably lower than other large metros, like New York, examined for this analysis. While the number of migrant 

firms is the same in both calculations, the pool of firms to which it is compared differs by the number of area firms that ceased operations in 

the interim.

Retention vitality among the largest construction industries is mixed. Retention rates themselves are low, but sales vitality is good and job 

vitality among retained firms at average levels. Retention rates among manufacturing industries are generally low, but the same industries 

indicate high sales and job vitality measures among retained firms. In most – fabricated metals, industrial machinery and electronics – sales 

per employee rates among retained firms are also high. Plastics also evidences high job and sales vitality, but with lower sales per employee 

rates. 

Both communications and business services are concentrated in technology services, and reflect lower than average retention levels for the 

larger industries. Vitality rates are higher, although sales vitality is dampened by the exclusion of headquarters and branch facilities from the 

sales analysis to avoid distortions. Vitality ratings in business support services, including legal and engineering-research, lead most national 

patterns.

1.02 1.08

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Washington, DC-MD-VA-WV

2001 firms analyzed: 211,379

Startups:

28,214

20.5%

1.05

6,381 2,460

2,419 38% 0.81

607,057 1,054,477 73.7% 0.60

8 21 163% 2.44

50,628 48,976 97% 1.16

101,176 75,320 -26% 0.55

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

104,996 2,710 2.58% 1.12

130,750 1,122 1.19

149,219 765 0.51%

159,957 153 0.1000% 1.71

'96 Firms in Class High Growth 96-01 % High Growth US Index

156,081 418 0.2700% 1.41

0.72%

1.29

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Extremely high concentrations of entrepreneurial activity in technology services are the most likely cause of low startup retention patterns 

throughout the MSA. Vitality rates among retained startups are low in the sales change category, but much higher than average in both job 

vitality indices. Sales per employee rates among retained startups are low.

Startup activity rates are high in most value-added or potential export services industries. Among manufacturers, startup activity is significant 

and particularly high in food products, chemicals and the series of heavier industries – fabricated metals, industrial machinery, electronics, 

transport equipment and instruments. Vitality is particularly high among retained industrial machinery startups. Communications startups 

developed at rates 17 percent above average, and business services starts are at US levels and higher in technology services. Retained 

communications startups indicated high levels of job vitality, in both average survivor job change and replenishment categories, as did 

business services. Vitality rates, as well as startup activity, is high among retained engineering-research startups.

Every job class category in the MSA indicates higher than average concentrations of high growth firms. The highest rates tend to be among 

larger firms. The high growth firm concentration couples with a significant advantage in entrepreneurial vitality to create an economic 

powerhouse oriented toward new technology firms which will increasingly complement the landscape of rural areas in the MSA and beyond.

Aggregate : All Classes 159,957 3,516 2.20% 1.08
ARC Firm Formation and Retention Analysis 1996-2001

Metro Wheeling, WV-OH

2001 firms analyzed: 5,593

Retention:

4,846 2,785

2,771 57% 1.14

440,227 700,150 59.0% 1.16

11 15 45% 1.09

52,637 42,592 81% 1.05

62,890 77,794 24% 0.75

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.14 0.72

Retained Firms

US = 1.00

The Wheeling MSA encompasses, Marshall and Ohio Counties in West Virginia’s ARC District 13J, the Region 10 Bel-o-Mar Regional 

Council and Planning Commission; and Belmont County OH, in District 8C, the Ohio Mid-Eastern Governments Association. 

The MSA indicates impressively high summary vitality rates in all indices except startup vitality, which runs almost one-third below national 

levels, and substantially below other ARC patterns. Aggregate vitality indices for retained firms are high with the exception of sales per 

employee rates, but aggregate retained startup vitality rates lag in all measures. High growth firm rates are excellent in all categories. But, as 

the discussion indicates, the vitality measures should be read in conjunction with the MSA’s extremely low sales per employee rates, which 

indicate that in almost every high vitality industry, low sales volume among retained firms tends to pump up the sales change.

The MSA’s aggregate retention rate runs 14 percent above the US average. Measures in every sales and employment vitality category, lead 

US patterns. The high growth indices are somewhat mitigated by low sales per employee rates, which indicate that high sales vitality patterns 

among retained firms are more an issue of catching up to average US levels than actual leading position.

The MSA indicates a low business out-migration rate of 0.3 percent from the 1996 pool of firms tracked, and about 0.5 percent among 

surviving firms from that pool. While the number of migrant firms is the same in both calculations, the pool of firms to which it is compared 

differs by the number of area firms that ceased operations in the interim.

Retention and vitality indices are excellent in all construction trades, but extremely low sales per employee rates among survivors suggest an 

industry that has lagged for some time and is only now beginning to catch up. Only a handful of manufacturing industries exhibit leading 

vitality rates, among them food products, wood products and furniture, printing and a variety of heavy industries, including primary metals, 

fabricated metals and industrial machinery. Survivor sales per employee rates are low in every one of these. Sales vitality and survivor sales 

per employee rates are much better in freight transport, and the communications industry reflects impressive vitality across the board – but 

again, low sales rates overall suggest that the vitality scores by themselves may be misleading. More in line with other northeastern ARC 

metros, technology-driven business services rates are high in the retention index and very low in sales and job vitality ratings, including the 

sales per employee category. Engineering-research industries are the exception, where high retention rates are matched by high vitality 

indices and high sales per employee rates.

0.75 1.16

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Wheeling, WV-OH

2001 firms analyzed: 5,593

Startups:

515

14.0%

0.72

126 66

64 51% 1.09

450,000 531,579 18.1% 0.15

6 7 17% 0.25

701 450 64% 0.77

75,000 88,596 18% 0.64

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,849 85 2.98% 1.30

3,641 34 1.29

4,165 18 0.43%

4,453 3 0.0700% 1.20

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,342 11 0.2500% 1.33

0.72%

1.09

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are very low. However, wood products and furniture, fabricated metals, industrial machinery electronics and transport 

equipment boast handfuls of startups that indicate leading levels of activity in each industry (relative to the number of industry firms in the 

MSA). 

Low startup activity levels find their match in low aggregate vitality scores among retained startups from 1996. The number of identified 

retained startups is low (64), making industry-specific analysis difficult. In aggregate, sales vitality rates are very weak among surviving starts, 

and average survivor job change not much better. Job replenishment rates are about three-quarters of the US average. In small part as a 

result of this relatively higher rate, but more importantly due to small sales volume to begin with and lackluster growth, sales per employee 

rates among surviving starts are also very low.

Given the problems with this overall picture, the leading concentration of high growth firms in the MSA is interesting. It seems likely that this 

group is driving whatever vitality exists in the MSA, and to whatever extent the area thrives, these firms, along with large, low growth but 

relatively stable mainstays, are responsible.

Aggregate : All Classes 4,453 105 2.36% 1.16
ARC Firm Formation and Retention Analysis 1996-2001

Metro Williamsport, PA

2001 firms analyzed: 4,611

Retention:

4,554 2,457

2,427 53% 1.06

503,869 617,682 22.6% 0.45

12 16 42% 1.00

50,713 39,804 78% 1.02

83,978 88,240 5% 0.85

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.06 0.66

Retained Firms

US = 1.00

The Williamsport MSA is contiguous with Lycoming County in ARC District 9G, the SEDA Council of Governments. It is one of four metros 

involved in the District.

The MSA fits the vitality patterns of most metros in the northern portion of the Appalachian region, including high retention, average to high 

startup retention (here at the low end of the pattern) and very low summary rates for both entrepreneurial activity and concentrations of high 

growth firms. In this case, most aggregate vitality rates are low as well, and concentrations of high growth firms lag across the board. 

Business out-migration rates are high, although mitigated by generally higher MSA relocation levels among single county metros.

Aggregate retention rates are 6 percent above average, but appear to be more a testament to very low entrepreneurial pressure as much as 

healthy stability. Business out-migration accounted for 0.7 percent of the losses from the 1996 analyzed pool of firms, and makes up 1.2 

percent of the survivor count – a relatively high margin. While the number of migrant firms is the same in both calculations, the pool of firms to 

which it is compared differs by the number of area firms that ceased operations in the interim. 

Job vitality measures among retained firms appeared good in aggregate, but the sales change measure lagged seriously. Sales per employee 

rates among survivors are 15 percent below the corresponding group at the national level. Job and sales vitality and sales per employee rates 

are low among all construction segments. Retention and vitality rates were considerably better in a number of core manufacturing industries, 

including food products and wood products, chemicals and plastics. Apparel reflected high job vitality ratings but low retention, a pattern also 

found in electronics. Industrial machinery stood out as a high vitality performer among a limited number of retained firms. Electronics, 

plastics, wood and food products firms also developed sales per employee rates for retained firms above national averages. Retention and 

sales change rates in transport equipment led national patterns.

Air and transportation services evidenced good retention indices and vitality ratings in small industries. However, both communications and 

business services, the most technology-driven services, indicate very low vitality (although good business services retention). Some retail 

industries show solid vitality ratings, as do legal services, and engineering-research.

0.85 0.77

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Williamsport, PA

2001 firms analyzed: 4,611

Startups:

413

13.0%

0.66

124 60

58 47% 1.00

550,467 847,170 53.9% 0.44

15 13 -13% 0.00

1,783 745 42% 0.50

50,042 77,015 54% 0.56

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

2,887 56 1.94% 0.84

3,577 21 0.81

3,951 11 0.28%

'96 Firms in Class High Growth 96-01 % High Growth US Index

4,130 6 0.1500% 0.76

0.72%

0.70

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity is the area’s weakest vitality category. Overall activity rates fall 34 percent below national norms. Only a handful of significant 

industries reflect leading startup activity rates. These include heavy construction, wood products, furniture, chemicals, primary metals, nondeposit financial institutions and brokers. While lagging US patterns, both communications and business services industries show startup 

activity rates higher than the rest of the MSA. 

Overall, startup retention was average, and the aggregate vitality scores of retained starts stayed far behind US patterns. Retained startups 

also performed well in some of these same industries. Startups showed high retention rates heavy construction, wood products, chemicals 

and business services. Business services, wood products, chemicals and industrial machinery also indicated high vitality rates, usually in both 

job and sales indices. Sales per employee rates among retained startups remained low almost across the board – but very high in the 

technology-driven business services industry.

Concentrations of high growth firms lagged national patterns both in aggregate and in every employment class size examined. 

Concentrations ranged as low as 70 percent of national levels in Class III (less than 25 jobs growing to more than 50) and as high as 84 

percent of the US average in Class I.

Aggregate : All Classes 66 1.57% 0.77
ARC Firm Formation and Retention Analysis 1996-2001

Metro Youngstown-Warren, OH

2001 firms analyzed: 21,228

Retention:

19,849 11,008

10,941 55% 1.09

505,053 764,052 51.3% 1.01

13 15 15% 0.37

239,035 157,796 66% 0.86

72,150 84,895 18% 0.82

1996 5 Year 

Survivors

All Firms

Sales

Avg Jobs

Replenishment

note: Sales per employee 

calculations use employment 

data only from firms for 

which sales can also be 

identified. Sales data 

reflects single site firms only.

Change Rate US Index

Sales/Employee

1.09 0.79

Retained Firms

US = 1.00

The Youngstown MSA includes Columbiana County, OH, within ARC District 8C, the Ohio Mid-Eastern Governments Association and one of 

four MSAs covering ARC counties in District 8C.

The MSA indicates a high summary retention score and an identical (1.09) summary startup survival rate. Vitality patterns among retained 

firms are generally low, and lower still among the population of retained startups. High growth firm concentrations are good at lower 

employment levels – a hopeful sign in a lagging entrepreneurial economy – but very low in the larger employment classes analyzed.

While aggregate retention rates are quite high and sales change among retained firms is slightly above average, job vitality indices are very 

low. Sales per employee rates advanced somewhat against US averages during the analysis period, but still lag by 18 percent.

Construction vitality appears significant; the MSA is probably experiencing similar impacts from commercial activity evident in the Sharon PA 

MSA to the east. Among manufacturers, food products, apparel and wood products firms all performed well in vitality measures, although 

retention rates in wood products were low. All three industries reflected high sales per employee rates. Plastics generated outstanding 

retention and vitality ratings as well as sales per employee rates 10 percent above average. Among heavier industries, fabricated metals, 

industrial machinery and electronics firms all performed well in sales vitality indices, but instruments lagged in sales and all four industries 

trailed in the sale per employee index. Job vitality ratings were high in instruments. 

Technology-driven communications lagged, but business services (including computer related) showed high retention and sales vitality 

among retained firms. Sales per employee remain low in both.

0.82 0.97

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Summary Vitality Index

Retention Sales per Employee Startup Activity Hi Growth Firms US Index
ARC Firm Formation and Retention Analysis 1996-2001

Metro Youngstown-Warren, OH

2001 firms analyzed: 21,228

Startups:

2,224

15.4%

0.79

577 299

294 51% 1.09

405,616 778,327 91.9% 0.75

6 9 50% 0.75

3,424 2,449 72% 0.86

67,603 97,291 44% 0.71

Sales

Avg Jobs

Replenishment

1996 5 Year 

Survivors

Change Rate US Index

All Firms

Sales/Employee

Startup Activity

96-01 Starts

 Start Rate

 US Index

High Job Growth Firms:

11,852 303 2.56% 1.11

14,986 111 1.02

16,920 55 0.33%

18,086 2 0.0100% 0.20

'96 Firms in Class High Growth 96-01 % High Growth US Index

17,698 22 0.1200% 0.65

0.72%

0.82

Class I : < 5 Jobs>10 Jobs

Class II : <10 Jobs>25 Jobs

Class III : <25 Jobs>50 Jobs

Class IV : <50 Jobs>100 Jobs

Class V : <100 Jobs> 250 Jobs

Retained Firms

Startup activity rates are the area’s weakest link, running 21 percent below national patterns in aggregate. Among manufacturers, strong 

startup activity is only evident in paper and industrial machinery, with rates in the important plastics industry approaching US levels. Retail 

startup activity is low. Business services startups appear at a rate 90 percent of the US average, but entrepreneurial activity among 

professional support services is extremely weak. 

Despite a low startup activity rate, retained fabricated metals firms stand out for vitality measures. Sales per employee among both fabricated 

metals and industrial machinery startups are far above average. The same is true of retained motor freight and transport services startups. 

Retention is high among personal and business services startups are strong, but only personal services indicate high job and sales vitality 

rates.

The area is driven in part by a reasonably good concentration of high growth firms focused on the smaller employment classes. High growth 

Class I firms are found in concentrations 11 percent above average; the rates drop from there down to a 80 percent lag among the largest 

Class V firms. The 300-plus high growth firms in the MSA appear to be the brightest spot in the economic vitality picture.

Aggregate : All Classes 18,086 355 1.96% 0.97