Michigan Association of Small Business Association (SBAM) Foundation just released 19th Annual Entrepreneurship Scorecard Shows Michigan’s Entrepreneurial Economy Continues Steady Growth, Even Above U.S. Average there is
The scorecard measures Michigan’s performance in entrepreneurship-focused economic indicators relative to other states, predicts trends, and identifies signs of future instability.
Over the past two decades, Michigan has experienced prolonged decline, stagnation, recovery, and growth. Despite the inherent risks associated with starting a small business, the index shows that the number of new start-ups is at a record high.
“The pandemic seems to have triggered a massive increase in entrepreneurship,” says SBAM President and CEO Brian Carey. “Michigans appear to be more entrepreneurial than ever, even as inflationary costs and labor shortages challenge them and a potential economic slowdown is on the horizon. .”
Beginning in the summer of 2020 and through 2022, Michigan has seen record business starts, including businesses with employees and businesses operating as independent contractors and sole proprietorships. Moreover, his 5-year survival rate for small businesses shows a marked improvement.
“The widely accepted rule of thumb is that more than half of start-up small businesses go bankrupt within five years,” Carey says. “However, since 2020, Michigan has seen a marked improvement in its five-year survival rate. The increase in new business starts and the number of companies that have survived beyond five years is a powerful combination for growth. ”
Positive economic indicators for Michigan small business identified in this year’s scorecard include:
- Small business revenues have increased 24.2% since 2020, triple the 8% increase in the US.
- Michigan now has 8.5% more small business openings than it did in early 2020. This compares favorably with the national average of his 3.1% increase.
- Michigan ranks 4th in the nation for four-year and technical qualifications, i.e., the percentage of bachelor’s degrees/certificates earned in technical-related fields. This talent pool is critical to Michigan’s future tech and non-tech growth.
The scorecard also identified pressing issues facing SMEs and entrepreneurs, such as a lagging workforce. Michigan’s working population is down 721,000 compared to January 2000. The labor force participation rate peaked at 68.8 percent around the beginning of this century. Michigan is currently struggling to stay above 60 percent.
And during that time, Michigan saw the steepest drop in labor force participation among young workers. By the end of 2022, Michigan’s workforce had shrunk by 97,200 since the outbreak of COVID-19. Although Michigan’s net internal immigration has improved over the past decade, it remains negative, suggesting that the supply of out-of-state workers is not promising.
In addition, the scorecard shows that inflation remains looming, with 40.6 percent of small businesses in the United States and 41.9 percent of small businesses in Michigan experiencing what could be described as a large/severe price increase in 2022. indicates that
View the full scorecard here.