Study Offers Areas of Business Growth State Needs to Focus On

Study Offers Areas of Business Growth State Needs to Focus OnA new study by the Illinois Policy Institute concluded that job growth is crucial to the future of Illinois. The study found that the largest job growth in Illinois should come from the establishment of new businesses. Unfortunately, Illinois ranked last among the 50 states in job creation during the period of 1995 to 2009. It was one of only six states to have a negative job growth during those years. But other states surrounding Illinois, including Kentucky, Indiana, Iowa, Wisconsin and Missouri, all experienced job growth — ranging from 5 to 11 percent — during that same time period.

The study did come up with three ways that new jobs are created within in a state: expansion of existing businesses, migration of businesses in and out of the state, and the net number of new businesses when business “births” and “deaths” are tabulated.

During 1995 and 2009, the migration of businesses into and out of Illinois basically canceled each other out. There was a gain of some jobs from the expansion and contraction of existing businesses. The study found that job expansion — existing business adding jobs in the state — was relatively stable but the contraction of jobs was widely variable, with some years seeing massive contractions and others experiencing less.

When it came to business births and deaths, the study found an average of about 78,500 jobs were lost each year because more businesses died than were born. In total, the state lost nearly 1,100,000 jobs in this category. The study concluded that creating an environment conducive to starting healthy new businesses is vital to increasing the number of jobs available to Illinois.

If you are planning on starting a business, consult with an experienced business attorney who can help navigate you through all the start-up requirements and advice you need.