Published May 18, 2015
Wisconsin has emerged as No. 2 in the United States in its “mid-market” business sector in the inaugural Dun & Bradstreet/American Express Power Index survey of 19 million American businesses released last month, outshining entrepreneurial superstars New York, California and Texas. This may be particularly surprising in light of past reports that Wisconsin fares poorly among such measures as number of startups and access to venture capital (although Wisconsin is not bad; high in private equity). In fact, ranking so high in mid-market companies is a likely leading indicator of growth that impacts the wider Wisconsin community, and bodes well for Wisconsin’s entrepreneurs, business owners and labor force.
Though it is oft-repeated that most new jobs are created by startups, the research is much more ambiguous. What matters for Wisconsin is that mid-market companies (between $10 million and $1 billion in annual revenues) are leading the way to post-2008 growth in the U.S., creating 92 percent of the net jobs in all commercially active businesses, despite being less than 1 percent of the number of businesses. These dynamic companies are typically privately owned, community-based, and more than 25 years old—neither the stereotypical tech startups, nor the stereotypically stagnant smaller businesses. Further, compared to the small businesses in the Power Index, fully one-third of which earn less than $10,000 per year, these mid-market ventures have a disproportionate presence in manufacturing, wholesale trade and natural resources, all of which play to Wisconsin’s strengths.
Comparing East Coast, Midwest, and West Coast is also interesting: Wisconsin has 50 percent more mid-market companies, proportionately, than California (3,037 vs. 16,391 in absolute terms), where small firms predominate. New York, on the other hand has more larger firms than Wisconsin. But Wisconsin punches well above its weight in the mid-market.
These findings bolster and write large the guiding thesis of Scale Up Milwaukee, a Greater Milwaukee Committee initiative supported by the Wisconsin Economic Development Corporation, American Express OPEN, and private donors: Ambitious entrepreneurs drive companies to scale, and scale up companies drive local economies by adding dignified jobs, bolstering tax revenues, creating wealth, and, let’s admit it, pumping up local pride.
Read the full piece by Dan Isenberg here.