by Alex Andrade, Judi Eyles, Aakansha Jain, Kevin Kimle, Peter F. Orazem, and Rosa Unal
Entrepreneurship is a key driver of economic growth. Even though only two-thirds of startups survive past two years, and only one-third last 12 years, the surviving ventures are responsible for 15% of employment growth (Yeh 2023). Because new firms tend to use new technologies while exiting firms are often using less efficient methods, the process of firm entry and exit is responsible for about one-quarter of aggregate productivity growth with the importance even greater during periods of economic expansion (Asturias et al. 2023). The slowdown in the rate of startups since 2000 in both urban and rural areas of the United States (Kim and Orazem 2025) has been blamed for at least part of the slowing rate of productivity growth in the United States.
Many colleges and universities have developed academic programs aimed at fostering entrepreneurial skills. Given the importance of startups for employment and productivity growth, is it possible to gauge whether these efforts have made a difference? We review the evidence in the context of a Midwest land-grant university. Entrepreneurship has been a focus at Iowa State University for many years, but the formal emphasis began in 1995 when Professor Howard Van Auken began teaching a course in entrepreneurship. The Pappajohn Center for Entrepreneurship opened in 1996. In 1997, the Iowa State launched a cross-campus minor in entrepreneurship, and the program has expanded since then. That does not necessarily mean that a larger share of Iowa State graduates would start businesses if they graduated after 1995, as the national trend of declining startup rates started shortly thereafter.
Our analysis is based on a 2024 survey of Iowa State alumni. Our usable sample focused on 5,416 Bachelor’s degree alumni who answered a sufficient number of questions to provide reliable information. Alumni graduated from Iowa State between 1982 and 2023. Individual responses were weighted so that results reflect the population of undergraduate alumni over that 41-year period.1
This report provides an up-to-date view of entrepreneurship and employment of Iowa State alumni by college and graduation year. We compare the current results to the results from 2007–08. Among the findings:
- Nearly 23% of alumni report starting at least one business at some point in their careers.
- Entrepreneurs come from all colleges at Iowa State, with the College of Design and Agriculture and Life Sciences producing the largest number of ventures.
- Iowa State alumni graduating between 1982 and 2023 are responsible for creating almost 64,000 firms, 841,000 jobs nationally, and 181,000 jobs in Iowa.
- Ventures started by Iowa State alumni succeed at a higher rate than the US average.
- There are almost as many Iowa jobs created by Iowa State alumni entrepreneurs as there were Iowa State graduates. Nationally, the ratio is 4.5 employed Americans in a firm started by an Iowa State graduate for every Iowa State student who graduated from 1982 to 2023.
In figure 1, we report entrepreneurship rates of undergraduates for the entire sample and by graduation year cohort. Overall, nearly 23% of all respondents report starting at least one business at some point in their careers. This compares favorably to the national self-employment rate of 16.5% (Kelley et al. 2022). As the cohort ages, the entrepreneurship rate increases, from 10.8% for the most recent graduates to 33% for the oldest group—those who are 37–41 years into their careers. Looking at the pattern of entrepreneurship rates by graduation cohort, just under 20% of Iowa State's graduates start a venture by their sixteenth year after leaving Ames. Another 10% start a venture over the following 10 years away from Iowa State. A small fraction start a business after completing a full work career. The results suggest that alumni do not start a business immediately upon graduation, but will typically start a business after building skills and working capital while working for someone else.
Graduates from every college are engaged in starting businesses. As in the 2008 survey, all colleges produce entrepreneurs. About one-third of Design graduates (33.62%) start a business at some point in their careers, the highest among all colleges. Nearly 29% of Agriculture and Life Sciences graduates and around 24% of Business graduates become entrepreneurs. Engineering and Liberal Arts & Sciences graduates report rates of 22.3% and 20.3%, respectively, while Human Sciences graduates have the lowest rate at 17.5% (figure 2).
Fifty-three percent of Iowa State’s entrepreneurial alumni started a business in Iowa. About 20% of the businesses are started in other Midwestern states and 17% are located in the western United States (figure 3).
What is more important is whether these businesses have a meaningful impact on the economy. As public universities, students receive state support for their education under the expectation that the public as a whole will benefit from their education. Using the sampling weights, we can estimate the total number of businesses and jobs created by Iowa State alumni who graduated between 1982 and 2023. As table 1 shows, Iowa State alumni created an impressive 64,000 firms over the 41-year period, employing 841,000. Almost 181,000 jobs were in Iowa.
| Graduation Year | Businesses Started | Jobs Created, US | Jobs Created, Iowa |
|---|---|---|---|
| 1982–1986 | 15420 | 209813 | 77566 |
| 1987–1991 | 10376 | 404031 | 38936 |
| 1992–1996 | 7917 | 79790 | 20261 |
| 1997–2001 | 8574 | 77212 | 8316 |
| 2002–2006 | 8109 | 33199 | 15283 |
| 2007–2011 | 4891 | 15477 | 7865 |
| 2012–2016 | 4688 | 13866 | 7504 |
| 2017–2023 | 4265 | 7593 | 5577 |
| Total | 64240 | 840982 | 181309 |
To put these numbers in perspective, there were 188,962 bachelor’s degree recipients from Iowa State between 1982 and 2023; thus, there was 0.96 Iowa jobs created in firms started by Iowa State alumni for every Iowa State graduate. Nationally, the ratio is 4.5 employed Americans in firms founded by Iowa State alumni per Iowa State graduate. The College of Engineering has created the most firms—14,800 firms employing almost 255,000 workers, with 31,900 in Iowa. The Colleges of Business (11,272 firms) and Health and Human Science (HHS, 7,157 firms) created fewer but larger firms, responsible for 242,000 and 148,000 jobs respectively. Firms from the College of Agriculture and Life Sciences employed 47,000 Iowans, while those from the College of Liberal Arts and Sciences employed 21,000, similar to Design and HHS.
Given more time since graduation, entrepreneurial alumni create more firms and jobs. The 2017–2023 alumni cohort started 4,265 firms employing 7,593 workers, with 5,577 in Iowa. By 20 years after graduation, the number of firms created doubles to over 8,000 and the number of jobs created rises above 33,000. The oldest cohorts who graduated between 1982 and 1991 created almost 25,500 firms and 613,000 jobs, with116,000 of those jobs in Iowa.
In table 2, we report the distribution of firm revenues by graduation cohort. Firms started by the newest graduates earn less than $1 million. Over time, the revenues rise so that by 20 years after graduation, about 8.7% are earning revenues over $1 million. About 17% of the firms started by the oldest cohorts with at least 40 years since graduation are earning over $1 million in annual revenue.
| Firm Revenue | <=1982 | 1982–1991 | 1992–2001 | 2002–2011 | 2012–2013 |
|---|---|---|---|---|---|
| <$250K | 65.47 | 69.79 | 82.61 | 84.16 | 96.34 |
| $250K–$999K | 17.2 | 13.17 | 8.66 | 9.54 | 3.66 |
| $1–$4.99 million | 9.54 | 12.16 | 5.71 | 3.71 | 0.00 |
| >$5 million | 7.8 | 4.88 | 3.02 | 2.59 | 0.00 |
The survey shows that Iowa State's alumni are atypically engaged in entrepreneurship. Their startups are atypically successful compared to national rates of firm exit. They have created almost one Iowa job for every Iowa State graduate since 1982, and 4.5 jobs anywhere in the United States per Iowa State graduate. From that perspective, the benefits of public support of Iowa State extends beyond the graduates themselves to the many people employed by Iowa State alumni.
Footnotes
1. This report is based on a subset of the findings contained in Andrade et al. (2025).
References
Andrade, A., J. Eyles, A. Jain, K. Kimle, P.F. Orazem, and R. Unal. 2025. "An Overview of the 2024 Iowa State University Alumni Survey." Working paper 25007. Department of Economics, Iowa State University. https://dr.lib.iastate.edu/entities/publication/97359445-0bab-4701-b30b-b225b517aa88
Asturias, J., S. Hur, T.J. Kehoe, and K.J. Ruhl. 2023. "Firm Entry and Exit and Aggregate Growth." American Economic Journal: Macroeconomics 15(1):48-105. https://doi.org/10.1257/mac.20200376
Kelley, D.J., J. Shay, M. Majbouri, C.G. Brush, A.C. Corbett, C. Daniels. 2022. Global Entrepreneurship Monitor 2021/2022 United States Report. https://issuu.com/babsoncollege/docs/gem-2021-2022-us-report
Kim, Y., and P.F. Orazem. 2025. "What Increases the Urban-Rural Gap in Firm Entry Rate?" Small Business Economics. Forthcoming.
Yeh, C. 2023. "Why Are Startups Important for the Economy." Brief 23-06. Federal Reserve Bank of Richmond. https://www.richmondfed.org/publications/research/economic_brief/2023/eb_23-06
Suggested citation
Andrade, A., J. Eyles, A. Jain, K. Kimle, P.F. Orazem, and R. Unal. 2025. “How a Land Grant College Affects Business and Job Creation.” Agricultural Policy Review Fall 2025. Center for Agricultural and Rural Development, Iowa State University. https://agpolicyreview.card.iastate.edu/fall-2025/how-land-grant-college-affects-business-and-job-creation