Friday, November 23, 2007

Ohio: Improving in Relative Friendliness to Small Business

The 2007 edition of the Small Business Survival Index is out. This is an annual study published by the Small Business and Entreprenuership Council and it gauges the relative friendliness of all 50 states to the small business community, and in a larger sense, the health of the overall public policy climate to promote economic growth and prosperity.

And, holy cow! What do you know? After languishing the last couple of years in the high 30s and low 40s, Ohio has jumped up to #29 on the list. Ohio is now the 29th most favorable state for small businesses. I have to say, this is a very encouraging sign. Of course, some of our neighbors are still cleaning our clocks. Indiana is #14 (slightly lower than previous years), Michigan is #6 (yeah, but their football team isn’t even ranked), Kentucky is #22, and Pensylvannia is #24. Even still, the fact that we’ve jumped up in relative terms is a good thing.

A few things were interesting to note: despite the Ohio Supreme Court issuing a ruling in favor of private property rights against eminent domain abuse, this study still gives Ohio a very poor grade on Eminent Domain abuse. This should be a reminder that we need more reform in that area. Also, given that 4 of the top 25 most dangerous cities are in Ohio, it was no surprise that our crime ranking was rather low. And the fact that we wrote a perpetual increase in the minimum wage into our Constitution, that's going to slow things down for Ohio.

I’ve said it before, small business is the lifeblood of a free market economy. That is where all the innovativeness and dynamism lies. Small businesses can adjust more quickly to changing market conditions, fill the gaps in the economy that big players can’t often do efficiently. 70% of all job creation comes from small businesses. A state that is inhospital to small business is not going to grow very quickly, if at all.

Take a look at the report. There are lots of little tidbits to be gleaned from these rankings. One can debate the particular reasons why… Or, maybe things are worse, but just everywhere else has gotten worse by a larger degree than Ohio…. Who knows?

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