MiQuest study finds positive direction in Michigan’s entrepreneurial economy
March 18, 2015
LANSING, MI. – March 17, 2015 – The eleventh annual Michigan Entrepreneurship Score Card – 2015 Edition reports continued positive growth in the state’s entrepreneurial economy. The Entrepreneurial Change Index, which measures the direction and momentum of growth ranks Michigan 12 out of the 50 states, up from 42 ten years ago.
Among the insights from the Score Card:
– Michigan’s entrepreneurial climate has experienced exceptional gains since 2009, when Michigan ranked among the bottom states for key metrics such as Growth in Establishments Gaining Jobs and Export Growth. Michigan now ranks in the top 10 states for several growth-related metrics, with especially notable improvements in export-related metrics. Michigan’s top rankings include:
- Growth in New Business Owners – #2
- Increase in High Performance Firms − #5
- Private Lending to Small Business − #2
- Export Intensity Growth − #7
- Export-Related Jobs − #6
– Despite economic hard times, Michigan has continued to invest in areas critical to future technology-based entrepreneurial growth. Throughout the 2000s, Michigan’s public and private sectors continued to invest heavily in R&D, innovation (measured by patents filed), STEM education, and job creation in technology fields. That perseverance has paid off in Michigan’s current rankings among the 50 states:
- University R&D − #8
- Industry R&D − #5
- 4-Year + Technology Credentials − #5 (Percent of bachelor’s and above degrees/certificates earned in technology-related fields)
- Physical Science and Engineering Workers − #4
- High-Tech Manufacturing Employment − #2
– Michigan’s Quality of Life metrics point to several strengths conducive to economic mobility and tech growth, including ranking #5 in Home Ownership.
The Michigan Entrepreneurship Score Card, analyzing data from 2003 to 2013, was released today (March 17, 2015) by MiQuest, a Lansing-based nonprofit organization serving more than 13,000 members of Michigan’s entrepreneurial community and more than 5,000 second-stage businesses.
MiQuest’s President Diane Durance said, “The Score Card rankings mirror what we’ve been hearing from entrepreneurs – businesses are growing and hitting new levels of sales, there’s a high demand for technical talent, and there’s increasing enthusiasm about the quality of life and opportunities in Michigan’s urban centers.”
This eleventh annual Score Card uses 137 metrics spanning a wide range of factors from business climate indicators to quality of life measurements that influence entrepreneurship. For each metric, Michigan is ranked along with every other state.
Here is a partial listing of the metrics:
- Business climate indicators include metrics such as:
o Growth in Business Survival
o Increase in Owner Incomes
o Net New Establishments
o Levels of Venture Capital Funding
o State Business Tax Structures
- Education metrics includes:
o Number of STEM-educated workers
o Number of engineering and other technology degrees awarded
o Levels of research spending at universities
o Availability of entrepreneurial education programs
- Quality of Life metrics include the availability of parks and recreational opportunities and home-ownership rates
The metrics are used to develop three composite rankings:
Entrepreneurial Climate, Entrepreneurial Change, and Entrepreneurial Vitality.
– Entrepreneurial Climate combines metrics to measure “the underlying supporting conditions for the entrepreneurial economy.” Factors include: innovation, capital, and general business conditions. This composite ranking uses 30 of the 137 total metrics gathered and reported upon. Michigan’s rank is now 21, up from 41 in 2008.
– Entrepreneurial Change indicates the direction and momentum of growth in Michigan’s entrepreneurial economy relative to other states. It is a three-year average of variables tracking the direction of entrepreneurial economy and its growth or decline. Entrepreneurial Change is influenced heavily by Michigan’s business climate, which has increasingly improved since 2009. Michigan’s rank is now 12, up from 49 in 2008.
“Since 2009, Entrepreneurial Change has picked up momentum and Michigan entrepreneurial activity has become increasingly more robust – and successful. The improvement in Entrepreneurial Change has been dramatic, from the bottom of scores for states in the industrial Midwest in the mid-2000s to a rank of 12,” reports Graham Toft, PhD, president of GrowthEconomics, Inc., who developed the statistical protocol behind the Score Card and has authored the report each year.
– Entrepreneurial Vitality measures the relative level of entrepreneurial activity in each state. This composite ranking includes metrics such as University and Research Institution Spinoffs and Federal Grant Awards.
“Entrepreneurial Vitality is a difficult index to impact. The state’s high level of large industrial and corporate activity overwhelms the activity in the entrepreneurial sector. Although improving, it will take many years for Michigan to build its structural Entrepreneurial Vitality to match its standing 100 years ago. Fortunately, for Michigan, the positive Entrepreneurial Change index suggests this transformation is under way,” asserts Toft. Michigan’s rank is now 31 and has shown steady slow improvement over the past five years.
The scorecard is sponsored by Clark Hill, Consumers Energy, Crain’s Detroit Business, DTE Energy Foundation, Michigan Municipal League, Michigan State Housing Development Authority, Presidents Council – State Universities of Michigan, Small Business Association of Michigan, and Varnum LLP.
For more information, or copies of the complete Michigan Entrepreneurship Score Card – 2015 Edition, go to www.MiQuest.org or contact Diane Durance, MiQuest president, at (734) 255-3183, or by email at ddurance@MiQuest.org.
MiQuest is a Michigan-based 501.c.3. non-profit organization providing research, services, events and opportunities to accelerate and celebrate entrepreneurial success. MiQuest’s mission is to ignite, unleash, and promote a culture of entrepreneurship in Michigan.