Arizona is the top state in the country for entrepreneurs, based on a study by the Kauffman Foundation, according to CNN Money.

The designation comes from comparing the number of start-up businesses to the number of adults in the state.

That's good news for Arizona, says Sherry Hoskinson, director of the McGuire Center for Entrepreneurship in the University of Arizona’s Eller College of Management.

But the designation doesn’t mean Arizona should stop trying to attract new businesses, she says.

“Having a competitive entrepreneurial environment is really critical to the prosperity issues that we face in Tucson, Arizona, and Southern Arizona," she says. "Continuing to build entrepreneurial capacity needs to be job one.”

It’s also important to note, she says, that the report is based on businesses that start, but doesn’t evaluate whether they stay up and running for any amount of time, or how many jobs they create.

"There’s a difference between sort of survival entrepreneurship — necessity-driven entrepreneurship — and entrepreneurs that are creating new companies that add jobs and so forth," Hoskinson says.

She says the state is in need of capital, or start-up investments, to encourage more business growth. She also says the state should be proud of the title No. 1 for entrepreneurs, and that Arizona is known as a small-business state.