Launching a new business isn't popular activity among Pennsylvanians, according to a new report that reinforces the long-held argument that the state isn't entrepreneur-friendly.

Business creation is so infrequent in Pennsylvania, there's only one state, Michigan, where it happens less often, according to the Kauffman Index of Entrepreneurial Activity, published yesterday by the Kansas City, Mo.-based foundation.

The index, which measures the rate of entrepreneurial activity, or new businesses started by first-time entrepreneurs, uses monthly data from the Current Population Survey since 1996 to track adults age 20 to 64 who have launched companies.

On average, roughly 465,000 new businesses were launched each month in the United States last year, the report said. That means 290 out of every 100,000 adults in the country went into business for themselves every month in 2006, mainly men in the construction industry -- a trend that hasn't change much over the past 11 years.

Yet only 170 of every 100,000 adults started a business in Pennsylvania last year, continuing a consistently poor showing over the past decade. Noting the report doesn't analyze the data but simply aims to paint a picture of business creation in each state, the study's author, University of California, Santa Cruz economic professor Robert W. Fairlie could not explain why Pennsylvania fares so poorly.

"This isn't something new," he added, of Pennsylvania's below-average performance in business startup activities. "What correlates with entrepreneurship is economic and population growth overall. Clearly, it appears in Pennsylvania, the opportunities are not there."

Part of the problem could be Pennsylvania's inability to draw large numbers of immigrants who, according to Dr. Fairlie's study, drive entrepreneurial activity in the United States by creating businesses at a higher rate than native-born Americans. Immigrants were behind the bulk of new businesses started last year, with 370 of every 100,000 starting their own business last year, compared with 270 of 100,000 native-born Americans.

The Pittsburgh region drew the fewest number of immigrants, about 16,000, of any metropolitan area in the country between 2000 and 2006, according to U.S. census data. This lack of immigrants is Pittsburgh's primary problem in terms of business generation, said S. Thomas Emerson, the David T. And Lindsay J. Morgenthaler professor of entrepreneurship at Carnegie Mellon University's Tepper School of Business.

But Pennsylvania's business tax structure isn't helping, either, Dr. Emerson added, noting other states have tax policies that allow entrepreneurs to keep more of value they create .

A nother contributing factor to Pennsylvania's low ranking was likely the state's large aging population, said Christopher Briem, a regional economist with the University of Pittsburgh's Center for Social and Urban Research.

States such as Montana, Mississippi and Oklahoma that topped the index are primarily rural, so it makes sense that they would have higher incidences of business creation, said Harold D. Miller, president of Future Strategies LLC, a Downtown-based management and policy consulting firm. Smaller, more isolated communities often spawn small mom-and-pop businesses to provide services that bigger companies aren't there to provide.

"If I were a lawyer, I might have my own practice in a rural area, but if I lived in an urban area, I'd be more likely to work at a law firm [with other attorneys]," Mr. Miller said.