The number of startups in rural Wisconsin dropped by 50% since 1978, according to a “Rural Innovation Report” conducted by the Wisconsin Startup Coalition (WSC) in partnership with the University of Wisconsin Department of Agricultural and Applied Economics and Alliant Energy Corp.
The report finds Wisconsin is below average in creating new businesses compared with other states. In 1978, there were 16 new businesses per 1,000 workers in remote Wisconsin and in 2018 that rate was half at about eight new businesses per 1,000 workers.
Rural areas are responsible for more startup growth than urban areas in Wisconsin. This trend is partly caused by more business proprietorship, a type of business ownership, in rural areas. The proprietors' share of employment in remote or adjacent to metro areas is high at 27% and 24%, respectively, according to the report.
“Rural communities are home to some of the most creative, talented and hardworking individuals you’ll find, and that pioneering spirit is what we need to jumpstart economic growth and move us toward a brighter future,” JP Brummond, vice president of customer and community engagement at Madison-based Alliant Energy (Nasdaq: LNT), said in a press release.
The report is a part of nonprofit organization WSC’s goal for the state to support more startups. WSC is a group of entrepreneurs, venture investors, community builders and policy advocates founded in early 2020 to improve the regulatory environment for new companies in Wisconsin.
WSC board chair Lydia Zeller said in the press release legislative support is key to entrepreneurial success in the state.
“Our elected officials have a huge opportunity to ensure that entrepreneurship is supported across the state,” Zeller said in the release. “This report establishes a baseline for impactful, collaborative policy work to make Wisconsin one of the best places for early-stage startups."
That support could come through solving the “credit crunch,” which refers to pre-venture and smaller businesses unable to access financial services at larger institutions. The report outlines a plan for local communities to use state and federal financing programs like those offered by the United States Department of Agriculture (USDA) or Small Business Administration (SBA) to fill this void.
While the number of startups in rural Wisconsin declined since 1978, the rate of statewide business applications increased in recent years, according to the report. Business applications in the last six months of 2020 were up 43% compared with the same period in 2019. Applications labeled “high propensity,” or those likely to go on and hire employees, increased 33%.
