Kenosha Startup Week

Article by Amy Greil, community natural resource and economic development educator, Kenosha and Racine Counties
Originally published in the Kenosha News.

The Kauffman Foundation, a highly credible and recognized leader in entrepreneurship research, looks to advance entrepreneurship, improve the education of children and youth and support civic development.

For the third year in a row, the foundation has produced an analysis ranking Wisconsin last among large states in startup activity.

This has to be taken seriously, as it is widely believed that entrepreneurship is a critical piece in the puzzle of a diverse and thriving economy.

Analyzing Wisconsin

In a new report (accessible at http://bit.ly/2xKR8nq) by University of Wisconsin-Madison Extension researchers Tessa Conroy, Steve Deller and Matt Kures, patterns between the most current Kauffman Index of Startup Activity and Wisconsin population data were analyzed to perhaps explain some of the reasons why our state consistently receives a low ranking on Kauffman’s index.

1. Population growth: Researchers compared Kauffman data and state population growth rates between 2000 and 2016. They found a strong positive relationship between Wisconsin’s lower levels of population growth and its low levels of startup activity.

This relationship is not surprising, as lower rates of population growth likely create lower demand for goods and services.

2. Net migration rates: Net migration rates (2014-2015, the most current available) also show a strong positive relationship to entrepreneurship rates.

Indeed, states that have high levels of positive net migration tend toward high levels of entrepreneurship (Nevada, Florida, Colorado and Arizona).

But, interestingly, there are also some states (Wyoming) that are experiencing high levels of entrepreneurial activity despite high levels of negative net migration.

I wonder what can be learned in looking more closely at these few examples.

3. Population dynamism: Data reveals that states with a higher percentage of the population born in the state have lower levels of startup activity.

In this case, Wisconsin ranks fifth in the nation in terms of the highest percent of the population born in the state at 71.6 percent, compared to a national average of 58.1 percent, which may not foster the needed dynamism to drive up entrepreneurship rates.

4. Foreign-born population: Within the economics literature, the evidence strongly suggests that higher levels of international migration are linked to higher levels of entrepreneurship.

For example, estimates suggest that immigrants represent 27.5 percent of all U.S. entrepreneurs, but only 13 percent of the population.

This means that Wisconsin’s rank of 35th nationally for the number of foreign-born residents does not bode well for entrepreneurship activity.

The take-away

Despite all the generalizations of Wisconsin, fortunately, we live in a vibrant region that may “buck” some of the assumptions above. But I do believe there are some valuable findings within this research regarding population changes.

Surely, we know that a growing, diverse and dynamic population tends to bolster entrepreneurial activity, and we need more of it.

What can we control? Perhaps we can rethink the degree of welcome and willing reception extended toward “non-natives” in our communities.

We can consider the robustness of the existing “ecosystem” that could attract and retain aspiring entrepreneurs.

We can adhere to a coherent marketing approach to attract and retain creatives to the region.

Coincidentally, our community hosts its inaugural Kenosha Startup Week this coming week to consider these questions and stretch our notion of the value of entrepreneurship.

Learn more at https://www.kenoshastartupweek.com/.

Amy Greil is community, natural resource and economic development educator for the Kenosha County University of Wisconsin-Extension.