The Illinois economy starts with the entrepreneur. For abundant job creation and a flourishing economy, Illinois needs to foster new businesses. But job creation in Illinois has been sputtering for years, causing thousands of Illinois families to migrate to other states for better opportunities. Since 1995, Illinois has lost more than 850,000 people to migration to other states, on net.

A recent Gallup poll tells us why: The No. 1 reason people want to leave Illinois is for work opportunities.

Yet policymakers are short of fresh answers to stop this outflow of people. Springfield politicians focus their solutions on a combination of crony tax breaks and increased government spending. In fact, Gov. Pat Quinn’s five-year economic plan is to double-down on both of those failed policies.

This combination has never worked for Illinois, and now we know why. Data from the most recent release of the Dun & Bradstreet National Establishment Time Series, or NETS, Database shows the importance of the three drivers of job creation in Illinois. (The NETS Database is based on establishments, which means that one organization can have numerous establishments in various locations, for example, Starbucks.) Ranked in order of importance, they are:

1. The success of new establishments

2. The expansion of existing establishments

3. The migration of establishments into the state

Illinois ranks poorly in all three sectors compared to the rest of the United States, doing especially bad with regard to entrepreneurs and new establishments. Over the 18 years of this study, Illinois has registered an annual loss of 3,700 jobs due to establishment births and deaths, an annual gain of 61,800 jobs due to establishment expansions and contractions, and an annual loss of 650 jobs due to establishments’ migration. However, establishment births and deaths affect nearly twice as many jobs as

establishment expansions and contractions, and 26 times as many jobs as establishment relocations. This makes successful entrepreneurship the key to Illinois’ future. Policymakers can foster job growth by lowering the cost of starting a business, cutting the red tape that encumbers new enterprises and slashing the waiting time for permits and licenses. Illinois can also help businesses expand by reforming prohibitive employer-liability laws such as workers’ compensation and lowering the overall tax burden so that businesses and consumers have more money to invest and spend.

The migration of businesses into and out of the state plays only a minor role in overall job creation, but oddly attracts the most attention. The governor can be seen crisscrossing the state offering tax carve-outs to preferred businesses. This misdirected policy is a total failure, and amounts to picking winners and losers with taxpayer money.

The Illinois economy is stumbling because policymakers are failing entrepreneurs. Even businesses that are able to survive the red tape, fees and wait times are later thwarted in their efforts to expand in Illinois.

Illinois needs to retool its economic engine, and then kick job creation into high gear. Policymakers’ work starts with championing Illinois’ entrepreneurs.