SHARE

By of the

The sluggishness that has long marked Wisconsin's entrepreneurial scene is impervious to gender, a new study indicates.

Wisconsin ranks well below the national average in the growth rate in the number of women-owned businesses since 2007, an analysis of U.S. census data for American Express Co. shows.

Among the 50 states and the District of Columbia, Wisconsin placed 38th in percentage growth of firms owned by women. It trailed every state in the upper Midwest, though Minnesota was only marginally ahead.

This shouldn't be surprising. Several times since the mid-'90s, analyses of U.S. Small Business Administration data and studies by the Kauffman Foundation and others have found essentially the same thing about overall entrepreneurship in Wisconsin.

Recent work by Tessa Conroy and Steven Deller of the University of Wisconsin-Madison, for example, showed that start-ups here accounted for a smaller share of job creation than in all but three states.

The importance of agriculture and manufacturing in Wisconsin may help explain the state's longstanding position as an entrepreneurial laggard.

Both are mature industries and, as such, tend to see less start-up action, Deller, an economist, said in an email. He also said Wisconsin's population profile skews a bit older, "which again puts a little downward pressure on new start-ups."

Dan Olszewski, director of the Weinert Center for Entrepreneurship at UW-Madison, also pointed to agriculture and manufacturing, but with a cultural twist.

In both manufacturing and dairy farming — Wisconsin's most important agricultural sector — success often depends on hard work, high quality and craftsmanship, Olszewski said in an email.

"All very important and valuable attributes," he added, "but less focused on the risk taking that is required in most start-ups."

That orientation, which has yielded success historically, "may make it culturally more of a challenge for many in Wisconsin to take the path of high risk/high reward start-ups, since failure is so often looked down upon but is a very likely outcome when an entrepreneur is trying to do something really big and game changing," Olszewski said.

In fact, a high rate of business failure can indicate a dynamic, healthy economy, Conroy and Deller write. They point to other research indicating that, in metropolitan counties, failures of business establishments actually increase the overall employment growth rate.

"In the simplest sense," Conroy and Deller write, "churn is healthy for the economy."

And churn is not characteristic of Wisconsin. The state has a relatively high business survival rate.

From a policy perspective, Wisconsin has been slow to embrace start-ups, Deller said.

"Our policies and strategies still tend to focus on larger, established businesses," he said in his email. "Policies like right-to-work tend to favor those larger, established firms and (do) nothing for entrepreneurship."

Deller said many elected officials "are still thinking 'old school' — trying to attract businesses to move into town."

The number of women-owned firms has grown by 26.7% in Wisconsin since 2007, the American Express study said.

Three states — Florida, Georgia and Texas — topped 60%. Nationally, the growth rate was 45.2%.

Besides raw growth in the number of women-owned businesses, the American Express study also ranked states on the growth of revenue and employment, and combined the factors to measure "economic clout." On the latter measure, Wisconsin also ranked 38th.

The report was prepared for American Express OPEN, a payment card issuer for small businesses, by a Michigan research and consulting firm, Womenable.

The study used the Census Bureau's Survey of Business Owners from 2002, 2007 and 2012. The data were extrapolated to 2016, factoring in changes in gross domestic product at both the national and state levels, according to the report's description of the methodology used.