Entrepreneurial Power Outage

Chicago and Detroit rank as the largest metropolitan areas in the U.S. with the lowest rates of entreprenurial activity, according to a new study by the Kauffman Foundation. The study, which measures business startups based on adult population, also reveals that Great Lakes states Michigan, Pennsylvania, Illinois, Indiana, and Ohio rank among the bottom ten states nationally in terms of entrepreneurialism. That's a disturbing reality for a region that invented the industrial assembly line, pioneered Internet technology, and to this day boasts one of the most powerful networks of research universities in the world.

"Regionally, the rates of entrepreneurial activity declined in the Midwest," the report states. "As a result, the Midwest had the lowest level of entrepreneurial activity of all [U.S.] regions for the first time in the past 11 years, replacing the Northeast, which historically had posted the lowest rates of entrepreneurial activity every year from 1996 to 2005.

The Toledo Blade seized on the report as yet another sign of the urgent need for the greater Great Lakes to move beyond the Industrial Age and embrace an economic development model based on knowledge and innovation.

That idea is widely accepted among civic, business, and political leaders throughout the region. The question is how to make the transition. And, generally speaking, that debate is split into two primary camps.

On the one hand there are those who advocate for slashing taxes and government to raise a more business-friendly climate. On the other are those who call for deepening investment in key social assets - cities, education, transportation, and the environment - in an effort to elevate quality of life, retain and attract young talent, and reverse the decline in entrepreneurial zeal.

Or, as the Blade puts it, "the longer it takes for states like Ohio and Michigan to stop "smokestack chasing" and reinvent themselves to compete in the 21st century, the harder it will be to change perceptions and attract interest from the entrepreneurial sector."