Startup activity sputtering in Indiana, report says

March 7, 2011
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Last year was particularly sluggish for Indiana startup activity, if an updated study from the Ewing Marion Kauffman Foundation is any indication.

The Kansas City, Mo.-based foundation, which studies and promotes entrepreneurship, reports activity was weaker in Indiana than in all but four other states—West Virginia, Pennsylvania, Wisconsin and South Dakota. The Midwest, by the way, is the weakest region overall.

Only 190 of 100,000 Indiana adults started a business in 2010, Kauffman said. The most active state was Nevada, where one in 510 launched one. Georgia and California also were hot.

Some caveats are in order. Tiny changes can swing the rankings because the smallest of differences separate some states. It wouldn’t have taken a lot to move Indiana up or down a few notches.

Also—and this was the main point of Kauffman’s latest report—many startups birthed during the Great Recession and its aftermath have been one-person shops. People are hanging shingles to keep themselves employed, which helps explain the so-called jobless recovery. Some of the businesses could vanish as soon as good jobs materialize. And some of those that stay in business may never amount to much.

Still, Indiana’s ongoing poor to middling startup rankings aren’t good news for a state needing more juice. Startups often supply the ideas, the energy and the lifeblood of economies.

What are your thoughts?

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  • Where's the support?
    Good article. As someone who did incorporate a startup in 2010, I'd just like to point out how difficult it is to find good support in this state. Indiana's options as far as startup incubators or legitimate investment funds are relatively limited and widely inaccessible. As the owner of a tech startup, I was shocked to find that unless I wanted to enter the medical technology field or move OUT of Indianapolis (where we are located right now), we wouldn't have much help. When you take a look at other major cities in the Midwest and around the country and the wide variety of support bases for startups, we pale in comparison. This is not to say that we have no support; we definitely do. I am just saying that my job of getting my company off the ground would have been considerably easier if the economy we are supposed to be bolstering viewed tech startups as the important resources they are and deserving of appropriate nurturing.
  • pres
    I loved out after having a startup in 1996 after 3 years based on several reasons.. Old boys network wants to keep the best within or without the group, weather and more deal flow on the coasts. While I am considering doing a StartUp Ventures at a 7k ft. building and giving $20k and free rent for 5 startups, this is not good news so will do extra research and planning. If you are a tech based startup, lets talk as the reason for us to move forward would be the quality, not the quantity so lets see whats in Indy. track me down if interested and lets help put Indy on the upper end of the map.
  • present
    Entrepreneurs.org is also considering starting in Indianapolis or South Florida. What is the reason to be based in Indiana verses the other cities? people will have there opinions but unless the startup companies and the business leaders really focus on creating value for everyone involved, good entrepreneurs will exit to other options (cities). there are some great Indiana companies but Entrepreneurs.org will be based in Indy or Miami, which would you do?
  • An expected enigma
    Great article, thank you. I found the fact that Indiana was lagging far behind an expected enigma. I think the natural follow up is â??whyâ??. I can only provide my own thoughts. A disclaimer is that my ideas are empirical derived, but I think they are generally correct. I am a young graduate of a top ranked East Cost law school. I left New York City over the summer to take an associate position at a boutique litigation firm in Indy. At heart, however, I am an entrepreneur. What swayed my decisions was Indianaâ??s relative stable financial position vis a vi other states, a solid university presence which, because of the recession has created a glut of well educated youthful college grads dyeing to get off their mom and dadâ??s sofaâ??s, and also, very cheep real estate. To me, this equals a perfect place to launch a start up â?? and I intend to do so. Look at the success of Angieâ??s list as a blueprint. If I were to take a stab at â??whyâ??, I would say that Indianapolis Mayor Greg Ballard needs to encourage people like me, whom are located in states like NY and CA (where start up costs require large cap outlays), to relocate to Indianapolis. Also, it tip my hat in Danielâ??s and his recent trip to Asia to capture international investment. Therefore, IN isnâ??t doing anything incorrectly, IN just needs to hire a good marketing firm
  • let's use comparable stats
    This is my pet peeve, but why not use comparable stats in the same paragraph? 190 in 100,000 and then 1 in 510 (which is 196 in 100,000). And if that's the difference between the best and one of the worst states in the country, then state to state comparisons are meaningless. Maybe year over year (or decade over decade) comparison for the entire country would be better.

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