Minnesota’s entrepreneurial spirit?

When Minnesota ends up near the bottom of a list, a few clicks from Mississippi, we should take note.


That’s where the state finds itself in a new index of entrepreneurial activity produced by the Kauffman Foundation.

There are limitations to the data, no doubt.

Still, the report opens the door to what could be a good conversation: Is the Great Recession generating new entrepreneurs and self-employed careers?

Post something below or share a story here about what you’re seeing.

We’ll also get some good data in a few weeks when the Federal Reserve Bank of Minneapolis releases its survey and research on small businesses start-ups in the Upper Midwest during the recession.

For now, though, two questions. 1.) How’s the recession affecting entrepreneurial activity and 2.) Why isn’t Minnesota more entrepreneurial?

In decades past, this question would have been a joke. This is the region that helped create the medical device industry, develop super computers and other cool stuff. But, arguably, we’re in kind of a rut and the debate seems to be stuck in a political battle over taxes.

In the Kauffman report, the states with the lowest rates of entrepreneurial activity were Mississippi, Nebraska, Pennsylvania, Alabama and Minnesota, which showed a rate of 220 new business owners per 100,000 adult population in 2009. (Check the bottom of the post for Kauffman’s methodology.)

Generally, the Midwest states track lower. The main reason is that there is less population and economic growth in the Midwest, says Rob Fairlie, the study’s author. “Areas that are faster growing with lots of construction typically have a lot of new businesses. Construction has the highest rate of business creation of all major industries.”

Oklahoma and Montana were tops with 470 new business owners per 100,000.

We speculated last year that the recession was spawning entrepreneurs.

We’ve profiled a Mankato entrepreneur with a business creating clothing from bamboo fibers.

We’ve also worried aloud about Minnesota’s ability to keep its best and brightest in-state.

Together, the work we’ve done created more questions for us than answers on recession, entrepreneurs and Minnesota, which is why we need your help.

Please add to the discussion. Tell us your experiences being self-employed or starting a business in the recession.

We plan to talk in-depth with Fairlie, the Kauffman author. We’ll add your stories, his comments and new data to future posts and we’ll all get smarter about what’s happening.


Here’s the boilerplate on how Kauffman creates the index: The index seeks to measure the “the rate of business creation at the individual owner level.”

Presenting the percentage of the adult, non-businessowner population that starts a business each month, the Kauffman Index captures all new business owners, including those who own incorporated or unincorporated businesses, and those who are employers or non-employers.

The Kauffman Index is calculated from matched data from the Current Population Survey (CPS), a monthly survey conducted by the U.S. Bureau of the Census and the Bureau of Labor Statistics.