New SBAM Entrepreneurship Score Card highlights upbeat progress in small business economy
April 17, 2013
For Immediate Release: April 17, 2013
Contact: Michael Rogers, VP Communications 517-267-2209
The Small Business Association of Michigan’s (SBAM) ninth annual Michigan Entrepreneurship Score Card (sbam.org/scorecard2013) reports very promising progress for both small businesses and the Michigan entrepreneurial economy at large. Vigor in the Michigan entrepreneurial economy parallels Michigan’s remarkable economic turnaround since 2009. Between 2009 and 2010 the number of business establishments grew 18.1 percent, and a decade-long annual decline in fast-growing “Second Stage” business employment slowed noticeably.
“The time is now ripe for Michigan to build upon the foundation of entrepreneurship and to initiate a period of sustained accelerated formation and growth of entrepreneurial ventures,” says SBAM President and CEO Rob Fowler. “SBAM will continue using the Score Card for its original purpose – to better understand Michigan’s entrepreneurial economy. Further, we will use it to measure progress as the state implements economic gardening programs, to better determine what causes economic growth, and consequently, figure out what other knobs the state might turn to foster and accelerate entrepreneurial growth.”
The Score Card uses three primary “drivers” to describe the condition and direction of the entrepreneurial economy in the state – Entrepreneurial Change, Entrepreneurial Vitality and Entrepreneurial Climate.
Entrepreneurial Change, the average growth over the past three years, showed marked improvement from rank 46 in data year 2010 to rank 31 in data year 2011. Notably, Michigan’s five-year business survival rate, which had been underperforming since 2003, is now at the U.S. state midpoint. And, private lending to small business continued to rank in the top five states. Other measurements show less dramatic change but rather slow continued improvement.
Entrepreneurial Vitality, a measure of the general level of small business and entrepreneurial activity relative to all other states, continued steady at approximately 10 ranks below midpoint, indicating Michigan still has a way to go to move the needle on overall entrepreneurial strength and presence.
Entrepreneurial Climate scored above midpoint for the second year, indicating overall strength in business conditions supporting entrepreneurial initiatives. With the Snyder administration’s welcome focus on economic gardening and small business dynamism (and the May 25 , 2011 enactment of business tax reform resulting in a dramatic Tax Foundation upgrade of Michigan’s Business Tax Structure from rank 49 in 2011 to 7 in 2012), prospects look good for accelerated progress in the future.
(1=best out of 50)
|National Rankings||Current Rating||2011 Rating||2010 Rating|
Note: Rankings indicate Michigan’s rank order among all 50 states (where 50 is last). Star ratings offer another way of understanding the data. Once underlying metric scores are calculated, the data is aggregated to produce state Index scores arrayed from high to low to determine the total range of scores. Each 20 percent of that range represents a star group – from five-star to one-star. For example, a five-star state is one that falls into the top 20 percent of the range of scores.
Looking to the future, Michigan’s economic assets continue to include postsecondary education, a highly skilled workforce; science, engineering and graduate output; and technology competitiveness. Overall Financial and Institutional Capital is also strong, especially IPO Financing and Private Lending to Small Business. Overall Quality of Life shows gradual improvement, especially in areas of Civic Energy and Harmony such as Rural-Urban Disparity, Charitable Giving and Racial/Ethnic Equity. But Michigan needs to further accelerate entrepreneurial growth if we are to reach our goal of being counted among the top five friendliest states in the nation for small business and entrepreneurship.