LANSING — The Small Business Association of Michigan said Wednesday that its ninth annual Michigan Entrepreneurship Score Card shows substantial progress for the Michigan entrepreneurial economy.

To view the score card, visit

The improvement in the score card coincides with a turnaround in business formation in Michigan — 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.

In entrepreneurial change, the average growth over the past three years, Michigan ranked 46th among the states in 2010 but improved to 31st in 2011. Also, 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, was steady at 36th, indicating Michigan still has a way to go to move the needle on overall entrepreneurial strength and presence.

In entrepreneurial climate, overall strength in business conditions supporting entrepreneurial initiatives, Michigan was 16th. Key here was business tax cuts that prompted the Tax Foundation to improve its rank of Michigan’s overall tax structure for favorability to business from 49th  in 2011 to No. 7 in 2012.

Looking to the future, Michigan’s economic assets continue to include postsecondary education, a highly skilled work force; 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.

The SBAM officials said Michigan needs to further accelerate entrepreneurial growth if the state is to reach our goal of being counted among the top five friendliest states in the nation for small business and entrepreneurship.


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