"Rapid population growth means more customers and more workers, particularly for high-tech companies, while a renovated art museum, four major sports franchises and the sunny climate attract residents," the magazine boasted about Phoenix.

The factors that encourage entrepreneurship are a skilled work force, good universities, a good airport, quality-of-life and a business climate that is positive toward start-ups, according to David Birch, president of the economic research firm Cognetics Inc, which conducted the research that resulted in the rankings.

The Phoenix area compares favorably in just about every category of the survey. The area has an annual net in migration of more than 70,000 new residents and sunshine more than 350 days of the year. Phoenix is home to such schools as Arizona State University, Thunderbird, The American Graduate School of International Management, and the University of Phoenix. The main airport for the region, Sky Harbor International Airport, is near Downtown and is the seventh busiest airport in the nation. Additionally, the median price for a new home is only $155,000.

Inc. magazine ranked Tucson No. 17 among small metro areas, behind Las Vegas, which is No. 1 and Austin, which is No. 5.