Why entrepreneurship is important

Minnesota is a homegrown economy

Minnesota has long-been a homegrown economy. Sixteen of Minnesota’s 18 Fortune 500 companies started here, with the other two originating in Wisconsin and moving their headquarters to Minnesota decades ago. Key industry clusters – from food and agriculture to health care and medical technology – emerged from rich entrepreneurial ecosystems that fostered their early development and nurtured their success over time.

The past is not always prologue, however. No ironclad law of nature guarantees this pattern to continue in the future. Research from Innosight suggests that about half of the S&P 500 will be replaced by other firms over a ten-year period. Natural churn in the economy means that regional and state economies must always be replenishing their stock of businesses, breathing new life and innovation into an ever-changing market economy.

Startups disproportionately drive job growth and innovation.

Economic research on entrepreneurship shows that young firms contribute significantly to job creation and overall economic dynamism in the U.S. economy. This is evident in Minnesota’s economy. In 2019, new employer firms in their first year made up just 2% of total employment but created 17% of total gross job gains in the state. Firms in their first five years made up over 27% of all new jobs. Spurring new businesses and supporting their success is a critical component of Minnesota’s overall economic performance.

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