THE GALLUP ORGANIZATION

Eric ThompsonUniversity of Nebraska-Lincoln

Entrepreneurship in Nebraska:Economic Indicators

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Comparisons

• There has been tremendous growth in entrepreneurship in the United States economy in recent years

• We compare Nebraska to the nation Has Nebraska fully participated?

• We also compare growth in the 6 community college regions of Nebraska

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Community College Regions

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Tracking Entrepreneurship in Nebraska

• We tracked the progress of entrepreneurship in Nebraska over the two decades by measuring: Growth in business counts New firm formation rates Income of entrepreneurs Income creation

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Comparison of NE with US Business Counts

• Net growth in the number of businesses in Nebraska lags U.S. by 0.5% to 1.0% per year.

• Nebraska population is also growing more slowly.

• These findings are related. Lower rates of business formation is one factor limiting population growth in the state.

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Comparison of NE with US Business Counts

• However, there are a number of factors that affect population growth. And, lower population growth also may limit

growth in business counts.

• It is useful to look at per person growth in business – to what extent are Nebraskan’s generating businesses?

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Employer Establishment Counts Per Person 2005

0.0300.028

0.000

0.005

0.010

0.015

0.020

0.025

0.030

0.035

Nebraska United States

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Annual Growth in Employer Establishments Counts Per Person 1994-2005

0.9%1.0%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

Nebraska United States

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Comparison of NE with US Business Counts

• The growth of employer establishments per person is similar in Nebraska and United States.

• The picture is different when examining all firms, including proprietor’s without employees.

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Annual Growth in Business Counts Per Person 1994-2003

0.5%

1.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

Nebraska United States

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Annual Growth in Business Counts Per Person 1994-2003 by Type of Business

0.0%

-2.5%

5.0%

3.6%

0.9%

-2.4%

4.5% 4.6%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Non-Farm SoleProprietor's

Corporations S-Corporations Partnerships

Nebraska United States

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Firm Births Per Person 2002-2004

0.0025

0.0028

0.0019 0.0020

0.0000

0.0005

0.0010

0.0015

0.0020

0.0025

0.0030

2002-2003 2003-2004

Nebraska United States

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Comparison of NE with US Income Creation

• Faster growth in income per proprietor and revenue per business in Nebraska.

• Faster growth in per capita income and income from wealth in Nebraska.

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Real Income Per Non-Farm Proprietor 2004

$12,093

$15,485

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Nebraska United States

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Annual Growth in Real Income Per Non-Farm Proprietor 1990-2004

1.3%

0.9%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

Nebraska Unites States

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Relative Per Capita Income 1990-2005Non-Farm Income

80.0%

82.0%

84.0%

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

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Income from WealthReal Per Capita Income from

Dividends, Interest and Rent 1990 to 2005

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

$3,400

$3,6001990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Nebraska United States

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Comparison among 6 Community College Districts

• Compare the number of employer establishments per person in the 6 districts, and growth in employer establishments.

• Compare growth in real income per proprietor, and per capita income.

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Employer Establishments Per Person 2005by Community College District

0.031 0.0320.030 0.029 0.028 0.027

0.000

0.005

0.010

0.015

0.020

0.025

0.030

0.035

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Annual Growth in Employer Establishment Counts Per Person 1990-2005

by Community College District

0.8%

1.0%

0.8% 0.8%0.9%

1.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

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Real Income Per Non-Farm Proprietor 1990-2004 by Community College District

$5,000$7,000$9,000

$11,000$13,000$15,000$17,000$19,000$21,000

Western Mid-Plains Central

Northeast Metropolitan Southeast

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Relative Non-Farm Personal Income 1990-2003by Community College District

70%

80%

90%

100%

110%

Western Mid-Plains Central

Northeast Metropolitan Southeastern

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Real Dividend, Interest, and Rent Income Per Person 1990-2004

by Community College District

$2,000

$2,500

$3,000

$3,500

$4,000

Western Mid-Plains Central

Northeast Metropolitan Southeast

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Conclusion

• Many indicators suggest an average level of entrepreneurship in Nebraska. Nebraska and the United States have a similar number of

businesses per person. The growth rate among employer establishments is similar

in Nebraska and the nation on a per person basis. Firm birth rates are slightly higher in Nebraska than

nationwide. Income per proprietor is growing more quickly in Nebraska

than nationwide, as is revenue per firm, and per capita income.

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Conclusion

• But many indicators suggest that entrepreneurial success in the state is concentrated in the Omaha area.

• While the number of employer establishments per person grew strongly in all 6 Community College Districts of Nebraska, the average income of proprietors was flat or declining in 5 of these districts.

• Omaha was the only region with rapidly growing average

income per proprietor.