Chart of the week: Waning entrepreneurial spirit in Illinois

According to a recent Gallup survey, only 60 percent of Illinoisans believe that this is a good state to start a business. Not only do we have one of the most negative views in the nation, but it stands in stark contrast to booming states such as North Dakota and Texas, where more than 80...

According to a recent Gallup survey, only 60 percent of Illinoisans believe that this is a good state to start a business. Not only do we have one of the most negative views in the nation, but it stands in stark contrast to booming states such as North Dakota and Texas, where more than 80 percent of residents have a positive view of their state’s business friendliness.

Data from the 2013 Kaufmann Index of Entrepreneurial Activity confirms this view. Illinois had one of the lowest entrepreneurship rates – one of the most important indicators of future job growth – in the nation.

Edward G. Prescott, a Nobel-laureate economist, and Lee E. Ohanian, a UCLA economics professor, recently opined in the Wall Street Journal that the nation’s reported GDP and productivity declines were the result of fewer startups. The economists examined startup rates for states from the 1980s to the current day and found declines in nearly every state and business sector.

This disturbing trend is even more evident in Illinois, where the gap between the state’s startup rate and the national average has consistently widened since 2001. But regardless of what action national leaders take, there are important steps – such as reducing the tax and regulatory burdens on job creators of all sizes – that Illinois can take to reverse this disturbing trend.

Illinois lawmakers need to understand that the entrepreneurial spirit is what drives job creation and economic growth. Creating a hospitable environment for entrepreneurs is one of the most important tasks of Illinois’ state leaders, but according to the data, they’ve simply not been up to it.