Nebraska ranked 18th and Iowa 11th in the 2013 State Entrepreneurship Index, a state-by-state measure of entrepreneurial strength produced by economists at the University of Nebraska-Lincoln.
Both states dropped slightly from their 2012 rankings, when Nebraska was 16th and Iowa 10th, but both remain significantly improved from two years ago, when Nebraska was at 24th and Iowa ranked 43rd.
Eric Thompson, director of UNL's Bureau of Business Research and a co-author of the national index, said both states have adapted well to a changing economy.
Both states have a history of strong income for non-farm establishments, he said. In recent years, both have experienced strong growth in new businesses.
"Nebraska's always been a fairly entrepreneurial state -- thinking of all the large companies based in Omaha and Lincoln," Thompson said. "Nebraska businesses have been able to thrive, relatively speaking, during the recovery from the Great Recession.
"Businesses in some states were too focused on auto manufacturing or housing, sectors that were permanently downsized. Nebraska is strong in other industries that have bounced back."
Iowa has seen strong growth in business establishments, both in absolute numbers and on a per capita basis, he said. Establishment growth indicates that new businesses are being created faster than older businesses are dying.
"The results suggest that Iowa businesses have adapted well to opportunities in the current American economy, including in transportation, financial services and agriculture-related industries," Thompson said.
The State Entrepreneurship Index combines five statistics to measure numbers of entrepreneurs, technological innovation and entrepreneurial income levels. Factors include establishment growth, establishment growth per capita, business formation rates, patents per 1,000 population and income levels for nonfarm proprietors.
State of Entrepreneurship Map