Wisconsin comes in last in Kauffman’s entrepreneur rankings

Wisconsin comes in last in Kauffman’s entrepreneur rankings

The picture in The Washington Post — a worried Green Bay Packers fan, game-ready with cheesehead and green- and gold-striped face — summed up the disappointing news.

So did the headline: “Wisconsin ranked dead last in start-up activity.”

In a year when new company formation rose nationally, Wisconsin dropped from 45th place to the bottom, according to the Kauffman Foundation’s annual Index on Start-up Activity released in early June.

Kauffman’s comparison of the top 40 metro areas provided no solace.

Milwaukee/Waukesha/West Allis, the state’s biggest metro area, was second-last for start-up activity, above only Pittsburgh. And Milwaukee was last for its rate of new entrepreneurs, with just 130 for every 100,000 adults compared with 550 for every 100,000 adults in Austin, Texas, the top finisher.

Some quibbled with the data Kauffman chooses to measure; some pointed out that Wisconsin looks better in other rankings. But the bottom line remained: The state lags in entrepreneurship and innovation.

The low level of start-up activity has profound consequences.

“The economic battleground of the 21st century is going to be for technical talent, and, outside of Madison, the state has had a shrinking pool of technical talent,” said Greg Meier, a well-connected member of the state’s start-up community.

“If we don’t turn that around, the ability of our existing companies to innovate and our ability to create new, innovative companies will be severely limited.”

Earlier studies have found similarly troubling trends.

Wisconsin had the most rapidly shrinking middle class of any state between 2000 and 2013, according to an analysis by Pew Charitable Trusts released in March. The state ranks at the bottom at creating companies that grow revenue to $100 million or more, according to a May 2013 Kauffman Foundation study called “The Constant: Companies that Matter.”

“These companies give cities, states and countries an unfair economic advantage,” wrote Paul Kedrosky, the study’s author.

Traditionally, the state’s economic development strategy, with Wisconsin Manufacturers & Commerce being the state’s biggest business lobbying organization, has been to heavily direct incentives toward industry, particularly manufacturing.

Although it is an important industry in the state, representing about 20% of all jobs, manufacturing “is not very prone to entrepreneurial activity,” said Tom Still, president of the Wisconsin Technology Council.

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