Montana leads the country in entrepreneurship, according to a new study by the University of Montana’s Bureau of Business and Economic Research.
Entrepreneurship is the focus of the Montana Chamber of Commerce’s Annual Economic Update Series, which kicked off at a lunch meeting Thursday in Kalispell. About 80 people attended.
Bryce Ward, who’s embarking on his own entrepreneurial venture with ABMJ Consulting, presented research he did for the BBER.
"Industries wax and wane," Ward says. "The entrepreneur's job is to kind of say, ‘Oh hey, that industry over there is on a downturn. That means there's some capacity that’s going unutilized here. Let me see if I can figure out how use that to do something else.’"
Ward found that in 2015, more than 10 percent of Montanans owned a business as their main job, compared to six percent of Americans. He also found that about 3,400 Montanans started a new business each month, and that more than half of the startups formed in 2011 were still open for business five years later. Ward says this implies a healthy entrepreneurial ecosystem.
"You put all that together, that's pretty good. We create a lot of seeds, those seeds germinate and tend to survive," he says.
But unlike elsewhere in the country, startups in Montana tend to stay small. In fact, the average size of a new firm is the lowest nationwide, with an average of three employees, compared to the national average of six. Ward says these young businesses also have lower aspirations, and typically not much intellectual property.
"Our firms are small," he says. "They’re less likely to scale up to anything big. They’re not going to be high growth. And they tend to be very local."
Ward says this could be because entrepreneurs in Montana are creating their business to serve local markets in small towns, so their growth is limited by the size of the market. He also says it’s hard to tease out the reasons why people in Montana start new businesses and why they stay small because entrepreneurship is a vast and varied field.
Courtenay Sprunger shared her experience founding Big Sky Public Relations in Kalispell in 2008 as part a panel discussion following Ward’s presentation.
"People go and create the opportunities they don’t see in the marketplace," Sprunger says. "That was potentially my story. If you look around at homegrown public relations agencies, especially those with a community relations focus, there are very few in Montana."
However big or small, these new startups create tax revenue for the state. BBER Economist Pat Barkey says the state’s general fund is slowly rebounding after last year’s disastrous miscalculations.
"We've got 10 percent growth in income tax payments," Barkey says. "We've got 9.5 percent growth in general fund revenues. And this is good news for the economy because it's a good indicator of how the economy is doing, but it comes off a very disastrously bad year."
Barkey says job growth is strongest in western Montana, where the tech sector is expanding and construction is healthy despite facing labor shortages. But he adds uncertainties in Washington, D.C. are weighing on land use and healthcare. He says agriculture producers in eastern Montana especially are battered by prices and drought.
The Montana Chamber of Commerce’s Economic Update Series heads next week to Glasgow, Sydney, Billings, Bozeman, Butte, Helena, Great Falls and Missoula.
Schedule:
Thursday, August 2 – Kalispell – 12:00 pm – Hilton Garden Inn
Monday, August 6 – Glasgow – 12:00 pm – Cottonwood Inn
Monday, August 6 – Sidney – 3:30 pm – Sidney Country Club
Tuesday, August 7 – Billings – 7:00 am – Northern Hotel
Tuesday, August 7 – Bozeman – 12:00 pm – GranTree
Tuesday, August 7 – Butte – 4:00 pm – NorthWestern Energy Office
Wednesday, August 8 – Helena – 8:00 am – Best Western Great Northern Hotel
Wednesday, August 8 – Great Falls – 12:00 pm – Hilton Garden Inn
Thursday, August 9 – Missoula – 12:00 pm – Hilton Garden Inn
