(Carolina Journal) – The Raleigh-Cary metro area ranks No. 4 in the country for small business performance, according to a CoworkingCafe study released Wednesday.
North Carolina’s state capital area trails only Miami, Austin, and Washington, DC.
The study measured metros with more than 1 million residents using a weighted scoring framework based on three categories: business environment, economic environment, and human capital. The high placement for the Raleigh area was driven by GDP growth, a high rate of business formation, and a deep pool of tech talent.
The Triangle has more than 11,000 small businesses per 100,000 residents, with those firms accounting for 47% of total employment in the area, according to US Small Business Administration figures cited in the study. New business applications hit roughly 1,900 per 100,000 residents in 2024, among the highest rates of any metro in the top five.
The local economy grew 39% from 2019 to 2023, according to U.S. Bureau of Economic Analysis data. The region also offers a coworking market of 6.3 flex workspaces per 100,000 residents at an average of about $263 per month.
Brian Balfour, senior vice president of research at the John Locke Foundation, said the ranking reflects the cumulative effect of more than a decade of state-level tax and regulatory reform.
“This high ranking comes as no surprise to anyone who has been paying attention to Raleigh’s rapid growth over the past several years,” Balfour said. “North Carolina overall has experienced significant economic and demographic gains in the last decade or so, buoyed in no small part by our welcoming fiscal climate. Tax reforms beginning in 2013 transformed North Carolina from one of the worst business tax climates in the nation to one of the best. CNBC has ranked North Carolina its top state for business three of the last four years.”
According to the most recent Scoring Tech Talent report released in November by the commercial real estate firm CBRE, the Raleigh-Durham tech workforce has grown to 76,570 workers. That is a 15.4% increase from 2021 to 2024, adding more than 10,000 professionals in three years. Tech talent now accounts for 7.2% of total employment in the region, and the average annual wage for tech workers employed within the technology industry is $122,435.
Moreover, nearly 45% of Raleigh-Cary’s tech workforce is employed inside the technology industry itself, and more than half of software engineers in the area work for tech firms.
Steven W. Pedigo, a professor of practice at the LBJ School of Public Affairs at the University of Texas at Austin, told CoworkingCafe that the metros leading the small-business rankings aren’t simply the cheapest or loudest about being “business-friendly.”
“They are the places where entrepreneurs can operate, connect, hire, find customers, and build a life,” Pedigo said. “That is the modern small business equation, and it’s about talent, quality of place, flexible space, social capital, market demand and a public sector that gets the basics right.”
The South dominated the large-metro tier overall, claiming four of the top five spots. Durham also drew a mention in the study’s mid-sized metro segment, where the firm pointed to its university-anchored talent pipeline as a driver of knowledge- and service-sector entrepreneurship.
Wake County Economic Development has publicly tied the broader momentum of the region to its tech workforce, noting in a November update that Raleigh-Durham climbed four spots to No. 12 in CBRE’s national tech-talent rankings as “innovation is thriving, talent is growing, and opportunity is expanding.”
Balfour cautioned that Raleigh’s trajectory also brings strains the state will need to manage.
“With such rapid growth, however, comes challenges,” he said. “Raleigh’s infrastructure and rapid rise in housing prices will require continued attention to continue to make it an attractive place to work and live.”
