“Minnesotans started fewer new businesses in 2012 than people in any other state, a troubling trend for a state with an economy built on homegrown business,” began a disturbing article in the Star Tribune a few weeks ago.
You may recall the story, which reported the findings of the Kauffman Foundation’s annual index of entrepreneurial activity that put Minnesota in last place.
Some are speculating that this could be good news in disguise, since high unemployment numbers tend to spur the formation of new businesses. If Minnesota had landed somewhere in the middle of the pack — such as we did in 2011 in a similar study conducted by the University of Nebraska — I might be able to buy that argument since we consistently had lower unemployment rates than other states during the long recession.
But last? Dead last?!
It sends a chill down my spine, and I hope it worries you, too. Surprisingly, Dan Carr, who heads the Collaborative, a Minneapolis organization that offers conferences and consultation to help growing businesses, doesn’t understand my angst. Carr is quoted as saying in the same story, “In my own little anecdotal world, I think we’re doing great.”
I think Carr — and anyone else who cares about Minnesota’s future — should take this news seriously. Our state isn’t just slipping, we are officially in last place. Keeping our heads in the sand isn’t an option.
I’m not interested in hand-wringing, finger-pointing or speculating about why we’re now the least entrepreneur-friendly state in the entire country. I am interested in doing something to get our beloved North Star State back in the lead where we belong. After all, a place that gave birth to Ecolab, 3M, Honeywell, Control Data and Best Buy can’t be expected to metaphorically “go gently into that good night” without even putting up a fight.
The good news is that the millennials are coming and they just might save us. According to a report from Deloitte Consulting called “Who Are the Millennials?” people born between 1978 and 1995 are “success-driven, techno-savvy, self-confident, hopeful, determined, goal-oriented, and entrepreneurial.”
They also are considered to be “flexible, action-focused, independent.” Oh, and the best part: They “want to produce something worthwhile” and they “love a challenge.”
The report includes a lot of other glowing attributes, too, but the one adjective not assigned to millennials is “stupid.”
I’m concerned that if we don’t start pulling together as a state to create a business-friendly environment, and soon, our best and brightest will be out the door and on their way to places like Montana, Vermont, New Mexico, Alaska or even Mississippi (those states ranked highest in the Kauffman Foundation report).
While lower taxes are a common feature in many of the higher-ranking entrepreneurial states, many also are pursuing proactive approaches to cultivate a new-business friendly environment:
• Missouri sponsors a New Markets development program that provides capital to entrepreneurs who start businesses and add jobs in low-income communities.
• Florida and Nevada offer online portals where businesses can collaborate, hold board meetings and finalize contracts virtually. They also provide a one-stop shop for all the resources budding entrepreneurs need to start a business.
• Texas has an Emerging Tech Fund that gives cash to start-ups who agree to partner with a university in the state for research and development work.
• Vermont hosts new business incubators in the state’s leading schools, including the University of Vermont’s Fletcher Allen Medical School.
Minnesota has leading schools, smart people with an incredible work ethic, and a beautiful natural and cultural environment in which to live, study, work, play and innovate. We need a pro-business environment to match and leaders who will drive a push to get Minnesota back on top in terms of new ideas, new products, new services and new companies. We have a lot to gain, too, since small businesses drive the economy, create the most new jobs and spur a lot of positive community benefits (they also, in many cases, become the bigger employers of tomorrow).
But we can’t expect younger people to do it all, especially in light of the coming “Silver Tsunami.” Demographers tell us to expect fewer children and more seniors. Within a decade, in fact, seniors will outnumber children. As those children age and come into the workforce, there will be an increasingly smaller workforce to support an increasingly older senior population.
Minnesota needs to start working now to be an attractive place for young people who want to be entrepreneurs. Our elected leaders from “both sides of the aisle” need to make this a top priority in our state. Gov. Mark Dayton started moving in this direction with his push for increased school funding, but that is just the beginning.
We have plenty of well-educated young adults in Minnesota now who need a welcoming place to follow their dreams and make a difference in our wonderful state. Let’s get our heads and hearts in the game and make it happen.
About the author: Tom Salonek is founder and CEO of Eagan-based Intertech, a software consulting firm. His e-mail is email@example.com.