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December 08, 2004
Rankings versus Rankings versus Rankings: How to Interpret Divergent Information
Another ranking has been released today on the entrepreneurial/economic climate across the US. The divergent findings of the various rankings released over the past few months are remarkable.
The Small Business and Entrepreneurship Council based its rankings from October 2004 on tax policy and regulatory climate and looks at entrepreneurship broadly defined to include all small businesses. SBEC came up with the following rankings:
1) South Dakota
2) Nevada
3) Wyoming
4) Washington
5) Florida
6) Michigan
7) Mississippi
8) Alabama
9) Colorado
10) Indiana
The Small Business Survival Committee came up with the ranking in September 2003 using similar criteria:
1. South Dakota
2. Nevada
3. Wyoming
4. New Hampshire
5. Florida
6. Texas
7. Tennessee
8. Washington
9. Michigan
10. Mississippi
On a world level we recently saw one ranking that found Scandinavia the most "entrepreneur friendly" area on earth. Why? Well, they defined entrepreneur friendly in terms of aggressive social policies and activistic government economic planning.
The Corporation for Enterprise Development (CFED) looks at entrepreneurship narrowly defined in terms of high growth, high potential ventures, typically venture capital backed. Their ranking, the Development Report Card which was released today, looks at a variety of variables all related to their narrow view of entrepreneurship. The CFED "honor roll" includes:
- Connecticut
- Delaware
- Massachusetts
- Minnesota
- New Hampshire
- Oregon
- Virginia
- Wisconsin
All of the states high in the CFED ranking have policies that favor active support for high growth and technology-centered businesses. None of these states are on the other entrepreneurship lists. The differences lie in definitions of entrepreneurship (broadly defined versus a narrow focus on high growth) and their theories of the proper public policy to foster entrepreneurial economic development (active or passive).
Posted December 8, 2004 05:35 AM
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Dr. Cornwall is interpreting the wildy varied results of three entrepreneurial climate rankings from the Small Business and Entrepreneurship Council, the Small Business Survival Committee, and the Corporation for Enterprise Development: The diff... [Read More]
Tracked on December 9, 2004 12:53 PM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
