We’ve been writing a lot about new construction and businesses opening around the valley as our economy cautiously bounces back from the recession. Montana’s character is on full display in that we like to take risks and forge our own paths, for better or worse.
Our entrepreneurial spirit was highlighted recently when the 2015 Kauffman Index of Startup Activity found that Montana has more startups per capita than any other state.
For every 100,000 residents in the state, Montana has 540 entrepreneurs starting a business each month, according to the report, far outpacing the national average of 310. The numbers garnered national headlines, including from Fortune Magazine, which titled its story this way: “This state has the most start-up activity – really.”
Really.
It’s the third year in a row Montana has topped the list and its dominance is growing. Last year our state led the survey with a lower average of 490 residents opening a new business each month. So headlines like this one from The Business Journal, “Startups thrive where the deer and the antelope play,” should be less surprising.
But for some reason, they still are.
People still question how our state, instead of California (with Silicon Valley) and Massachusetts (with Boston), is leading the charge. And there are several answers, one of which is obvious.
The east side of the state is credited with much of the new economic activity largely connected to oil and gas in the Bakken region in North Dakota. That theory is backed up by the fact that Wyoming and North Dakota are second and third respectively on Kauffman’s rankings. But those two states still lag well behind ours in the rate of new entrepreneurs.
One could argue that many Montanans branched out on their own because they lost their jobs and had no other choice, but that assessment is mostly wrong. The Kaufmann report factors into its ranking the percentage of new entrepreneurs driven primarily by “opportunity” as opposed to “necessity.” Here, 84 percent of new entrepreneurs took the leap to take advantage of an opportunity.
Now that activity in the Bakken has waned, the new question is whether Montana’s three-year reign will soon end. Perhaps, but I doubt our state falls far. Outside the Bakken area, our economy continues to grow at a healthy clip. Our jobless rate fell to 3.9 percent in May, according to the Department of Labor and Industry, and employment levels recently surpassed the 500,000 mark for the first time. Montanans who make their own work and want to be their own boss created a lot of those new jobs.
On a more anecdotal and local level, how many people do you know who have started their own business in the Flathead? I know several and am continually adding to that list. Over the last year, we’ve written about locals opening galleries, distilleries, restaurants and construction firms. To be sure, not all these new enterprises will survive and many of their owners will end up working for someone else, or starting a new venture. But here more than anywhere else, the potential reward is worth the risk.
“There is sort of a pioneering spirit here in Montana,” Paul Gladen, director of the Blackstone Launchpad at the University of Montana, told the Missoulian. “People are always being resourceful and figuring out how to do stuff.”
In other words, when jobs were scarce in the wake of the recession, Montanans put themselves back to work.