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Arizona Leads Nation in Entrepreneurial Growth, Study Reports

Published: Thursday, May 10, 2012

Updated: Monday, May 14, 2012 13:05

Entrepreneurial story

Tiera Allen

Arizona may be in the desert, but it’s fertile ground for entrepreneurs looking to launch their business.

Arizona had the highest rate of entrepreneurial activity in the nation last year, according to a recent Kauffman Foundation report.

In 2011, 520 adults for each 100,000 created a new business in Arizona per month — beating the national average of 320. While Kauffman research fellows caution that year-to-year changes may not be significant, the results mark an upward trend for Arizona, suggesting a startup friendly environment is coming to fruition in the desert.

“There have been so many positive changes in the entrepreneurial environment in Phoenix over the last two years,” said Fred von Graf, who runs the co-working space and tech accelerator LaunchSpot in Tempe. “The right people are in the right positions making really good changes.”

Von Graf started LaunchSpot in 2010 as a way to leverage his business connections and knowledge to make a difference in the community. LaunchSpot hosts rapid pitch events, offers free co-working space and plans to start an accelerator program for tech companies. By the end of the month, LaunchSpot plans to open at new location on Mill Avenue to pool from Arizona State University’s talent.

He hopes to fuel the entrepreneurial fire and produce more jobs for Arizona. Startups are the key to job growth since companies that are less than five years old create the most new jobs, according to the Kauffman Foundation.

But LaunchSpot isn’t a lone soldier in the quest for entrepreneurial support.

Von Graf attributes Arizona’s recent jump in the number of startup businesses to an increase of resources. The perfect blend of talent, capital and collaboration is popping up around the Valley at places like AZ Disruptors, Gangplank, SkySong Center and the Arizona Commerce Authority. To continue the upward trend von Graf believes that Arizona needs to continue to draw local and national attention to these resources.

While von Graf believes the increase of new business is due to the rise in resources, others believe it’s a response to the current economy.

“During any great period of change people have to become creative,” said Erik Johnston, an associate professor at ASU. “Arizonans in general have to be adaptive to change because we don’t have the stability of other states, so people who do well here tend to be entrepreneurial and able to adjust.”

Whether it’s the resources or the recession, supporters of entrepreneurship believe innovation needs to continue to be pushed at the educational level.

“ASU in general has been very focused on allowing students to create their own destiny,” said Johnston. “We are teaching them the skills to work together, to build stuff and to create proactive change – which is what the spirit of entrepreneurship is.”

He notes programs like 10,000 Solution, an online forum where students have posted more than 2,500 innovative solutions to societal problems, and the Policy Challenge, a partnership with ASU and the White House to identify and breakdown barriers to entrepreneurship.

We want people to get in involved in their own lives,” Johnston said. “We want them to be able to look at different problems or opportunities within their environment and, instead of waiting for someone else to deal with it, we want to empower people to address it themselves. Quite simply that is what it comes down to. We want more empowered people.”

Stephanie Lee did just that when she opened Bébé EcoPosh in 2011.

When Lee, an ASU graduate student, was pregnant with her daughter Sophia she started searching for environmentally friendly baby products — like hybrid diapers that biodegrade within 90 days instead of traditional diapers that take up to 500 years.

“I wanted to start implementing a life change in myself to live a more greener life, and I wanted to bring Sophia up in that type of environment and instill those values in her,” Lee said.

But like most moms, Lee wasn’t satisfied with the bland eco-friendly products and sought out more stylish options.

“I realized that these products existed but there wasn’t actually one store online to purchase them, so I saw an opportunity to bring all these great stylish eco-friendly products to one place,” she said. “It’s not only 

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