One job at a time

Measuring entrepreneurship is an elusive business.

Data crunchers from the census bureau, the Internal Revenue Service, academia, the Bureau of Economic Analysis and other organizations take a variety of stabs at getting a handle on it.

None of them capture precisely the psychological, light-bulb-going-on approach to the world that people have in mind when they think about entrepreneurship. But, taken together, they can shed light as communities try to think differently about entrepreneurship and its role in economic development.

A lot of those measures haven’t looked so good lately in Minnesota.

You hear more people around the state talking these days about developing a “culture of entrepreneurship” as a promising means of developing and sustaining healthy local economies. It’s time, you hear these people say, to stop relying on large employers coming into town and hiring hundreds. Instead, you hear increasing talk about “gardening” and “growing your own,” one job at a time, by creating environments that make entrepreneurship more attractive.

Ground Level, MPR News’ project for exploring community issues in Minnesota, is going to take a look at that effort over the next month or two. Look and listen for stories from around the state about incubators, microlending, start-ups, people with bright ideas and people forced by a poor economy to become entrepreneurs. We’re calling it “One Job at a Time.”

But first, here are two things that jump out at me after strolling through the data for a few days.

–When you look at graphs showing change in Minnesota’s self-employment or in new companies started or in income generated by sole proprietors — all of which get at part of entrepreneurship — you see a dropoff in the latest years for which numbers are available.

Two examples:

The number of Minnesotans identifying themselves on their tax returns as generating income from self-employment peaked in 2007 and then fell two years in a row. Some predict this number is starting to rise again but here’s what it looks like from the numbers available.

MN self-employed.JPG

And the amount of income reported by business proprietors (including both self-employed and those who hire others) likewise has seen a decline since a peak in 2006, as reported by the Bureau of Economic Analysis.

MN proprietor income.JPG

–But interestingly, when you break those sets of numbers down geographically, an area of southwestern Minnesota seems to be fighting the trend better than other places.

Almost every county declined in self-employment since the peak in 2007, but a half dozen counties along the upper Minnesota River were among those with the smallest declines. The darker shaded counties showed the least decline (Yellow Medicine was flat, in fact.)

And when it comes to proprietor income, counties bucking the trend and actually increasing since the 2006 peak are concentrated in the same part of the state. Again, the darker shaded counties showed the biggest increases. (Traverse County, the state’s least populated, led the way.)

I asked Kurt Thompson, program officer for the Southwest Initiative Foundation in Hutchinson why this might be the case. The farm economy has been booming, he noted, but he also mentioned an ethic of hard work and something in the culture of the region that makes people do for themselves.

Likewise, Pam Lehmann, economic development authority director for Lac qui Parle County, said the emphasis is on entrepreneurs in her part of the state. She told MPR News reporter Jennifer Vogel:

“When I started in January 2007, my board said, ‘We don’t want you to chase any smoke stacks. We don’t want you to chase the big company that will employ a couple of hundred people.’ If they want to come here, we won’t turn them down, but we’re not actively recruiting them. We feel we’ll have more long-term impact by helping the one-man shops get started and grow. If you help 100 small guys get started, you’ve created 100 jobs. If one or two fail, that’s not the impact of one big employer failing and losing all the jobs.”

I’d love to hear people’s thoughts about the value of this data and whether there are signs of change in the wind. We’ve been asking entrepreneurs in our Public Insight Network what they think about conditions, as well.

We plan to go down this avenue with our reporting in the coming weeks. We’ll look at places where artists underpin entrepreneurship, where former manufacturing plants have formed a platform for small-business growth, where green energy is triggering action and where the “secret ingredient” seems to be a person who’s just plain good at making something happen.

Stay tuned.

  • It will be interesting to see the impact that broadband has on these areas. Lac qui Parle is in the process of seeing a major upgrade and Redwood is starting to gain traction towards wider broadband use and deployment. And in the opposite corner of the state – I see that Cook County is keeping par with these communities in terms of self-empoyment, if not proprietor income.

    It’s a testament to the local champions in these areas that entrepreneurship and broadband are both bubbling.

  • Duaine E. Flanders

    If one looks at the population trends in Western and Southwestern, Minnesota, they are declining; therefore, to expect a business to thrive on this general population, it is a tough sell. However, if, as was suggested, one finds a niche market, which at one time meant small, yet, today can be huge. This “huge” market comes to the doorstep via the internet. Yes, smaller, local businesses, grow to large enterprises and they employ local folks who want to remain in the area. I have lived in Benson, Minnesota and was involved in a part of its development and growth built upon this philosophy. Small kernels nurtured properly can grow into very productive plants.

    To build in today’s evolving potential mentioned, one must do things differently. This is one thing I see needed here to support growth.

    I look forward to more thoughts. Folks with vision for tomorrow enable the new enterprises to grow and flourish.

  • Shannon Duffy Peterson

    Ok so Redwood County is going to follow soon on broadband internet? I can’t wait and it won’t be soon enough. I have been living here since 93′ my husband (both of us former bankers) back to running his family farm and I knew right away the salaries weren’t even close to the cities so I had to do it on my own as a business owner/self employed. We are used to it out here finding our own way – making our own money and failing if that happens again on our own. Hard work absolutely but our own boss. Deciding it is ok to take time off to spend with the children but yet trying to make enough to pay for healthcare. I sell financial education to the financial industry and have been doing it for 16 years as a business rather than volunteer. Yes, everything has moved to the internet which out here is spotty at best. So my pot of gold is based on what we do as a state or county to improve internet service. People in the cities would never understand the hurdles out here but we are willing to pave our own way.

    Self employed and loving every minute of it