Study: Heartland lags in entrepreneurship

A Heartland Forward report out today outlines six key factors that policymakers can influence to promote entrepreneurial growth in the middle of America.

• The organization is a Bentonville-based think tank focused on improving economic performance in the 20-state region in the center of the U.S.

Why it matters: A healthy entrepreneurial ecosystem can help sustain an area's economy by creating jobs, elevating standards of living and supporting other businesses.

State of play: In 2016, there were about 3.3 million workers at young firms (five years old or less) in the heartland, which accounted for 9% of all jobs in those states. Nonheartland states had 9.3 million workers at young firms.

• Zoom in: Capital investment in Arkansas startups is low compared to many other areas.

What they did: Researchers built the index on data about young companies, including several factors like populations with bachelor's degrees, households with computers, access to investment capital and government grants.

• As part of the report released today, the organization published an interactive calculator so state policymakers can see how adjustments in one area will impact their index.

Threat level: Texas is the only heartland state ranking in the top 25 of the entrepreneurial capacity index. It's No. 14.

• 16 of the lowest 20 positions on the index are heartland states.
• Arkansas, known for entrepreneurs like Sam Walton, John W. Tyson and J.B. Hunt, ranked No. 46 on the list.

What they found: Researchers point out steps state policymakers can take to boost entrepreneurship.

1. Fund entrepreneurial support organizations, such as chambers of commerce or business networks that help build relationships and collaboration.
2. Earmark state-level funding for investment in young firms.
3. Improve access to high-speed internet, which helps provide opportunities for remote work and learning.
4. Invest in higher education since there is a direct correlation to the percentage of the population with a bachelor's degree or higher with entrepreneurship.
5. Teach entrepreneurial thinking in K–12 schools to perpetuate economic growth and provide underprivileged populations education that may lead to business ownership.
6. Tap into initiatives like the Community Growth Program and Toolkit that help stimulate entrepreneurial thinking on a micro level.

What they're saying: Liz Hubing with Iowa City Area Development Group hasn't yet seen the report or interactive calculator but tells Axios it will be a welcome resource.

• Having data that show her fellow competitive Iowans how the state can advance will be a valued resource, she says.

What to watch: Researchers at Heartland Forward tell Axios they plan to publish a similar entrepreneurial index for a city-by-city level in early 2022.

Editor’s note: The graphic above has been corrected to reflect the accurate state abbreviations for Kansas ("KS") and Missouri ("MO").