Michigan Entrepreneurship Score Card

Key takeaways from this year’s report include:

• In the last 20 years, Michigan gained, then lost, a leadership position in net new jobs from business expansions. Between 2011-2019, Michigan job growth skyrocketed, becoming one of the best performing states in this area. Since the 2020 Recession, Michigan continues to track downward toward the lowest performing state.
• The per capita income gap between Michigan and the rest of the nation has gotten worse in the last 20 years.
• Michigan saw impressive gains in small business growth and vitality between 2012 and 2018, but that progress has faded since the pandemic.
• New business formations continue to drive job growth and diversify Michigan’s economy.
• Since the mid 2010’s, Michigan’s small business survival rate has improved and moved closer to Massachusetts, the best performing state.
• In the last 20 years, Michigan’s labor force participation has continued to decline, a trend that will likely persist and worsen in the coming decades.
• Read more details in our press release

The economic conditions identified in this year’s scorecard include:

• Michigan economy holding up well in 2021-2022: Top category for three-month economic improvement in 7 of the last 9 months
• Michigan small businesses have been outperforming the U.S. since 2020 (measured in percent growth in businesses open and in business revenue)
• Spending and consumption have remained strong, along with exceptionally strong state sales tax collections
• New business starts have been notably robust since the second half of 2020 and the 5-year establishment survival rate of small businesses has begun to inch up.

With years of annual Score Card experience SBAM has become familiar with the peaks and valleys of the Michigan economy, but none have been quite so disruptive as the valley we find ourselves in during the COVID-19 pandemic.

To best understand this impact, it was decided to produce a variant Score Card for 2021. But to do so we needed to better understand what might lie ahead for the second stage companies as well as what we can learn from past major economic recoveries. For the purposes of this discussion “second stage” companies refer to businesses that are beyond the start-up phase, but still small by employment and revenue standards.

This is the spring edition of the Score Card where we look at Michigan’s economy in the shape of recovery, how Michigan compares to all states and business trends.