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For the third year in a row, Montana has been named the top state in the country for entrepreneurial activity by the Kauffman Foundation’s Index of Startup Activity.

According to the report, there are 540 new entrepreneurs for every 100,000 adults in a given month in Montana, up from 490 last year.

Montana significantly outpaced the national average of 310. The state’s density of startup firms per 100,000 residents was up to 195.7 this year, from 184.7 last year.

The study concluded that entrepreneurial activity is generally highest in Western states, and Wyoming, North Dakota, Colorado and Vermont rounded out the top five, while Wisconsin came in last.

The study’s authors tracked all non-business owners who started a business each month and averaged that number out for a year.


Scott Whittenburg, the vice president for research and creative scholarship at the University of Montana, said the Missoula area in particular has a variety of factors that make it conducive to fostering new businesses.

“For the Missoula area, there are three things that help drive entrepreneurship,” he said. “One is the culture of the citizens and students and faculty at UM, the entrepreneurial spirit that rises in the Missoula area.

"And then we provide support for that entrepreneurial spirit in a couple of ways. One is the Missoula Economic Partnership, a partnership between the mayor and UM and James Grunke and his staff. They provide a lot of support.

"The other is the university itself. There are a number of things to encourage business startups at UM, like the Blackstone LaunchPad that encourages company formation for students, staff and alumni. Another one is the business incubator MonTEC center, which provides support for entrepreneurs to become thriving business, as well as the Office of Technology Transfer. All of these things provide the support that is required for company formation.”

Whittenburg said that having these support systems in place gives would-be entrepreneurs the confidence to dive into the process.

“They see that it’s been successful for others, and they realize they’re not going to be left on their own,” he said. “The Missoula area is helping them to succeed.”

High-tech startups especially have found Missoula to be a conducive atmosphere for growth, Whittenburg added.

“We are a hub for Internet, so on the university side, we have excellent IT connectivity in this area,” he explained. “That provides the IT support companies need. We also have a large group of companies in IT in the area, so there is a culture that encourages IT formation as well.”


Paul Gladen, director of the Blackstone LaunchPad at UM, a program designed to develop entrepreneurial skills, said the Internet has removed the geographic barriers that used to make people reluctant to start a business.

“I think in no particular order, there is sort of a pioneering spirit here in Montana,” he said. “People are always being resourceful and figuring out how to do stuff. Combine that with some trends, such as the ability to tap into global markets, the use of technology, and globalization trends and social media make it much easier to reach markets.

"It’s much easier to do things from anywhere. It’s much easier to think about starting a business in Montana, whereas people once thought ‘I need to be in a big city.’ There are some broad macro factors that make it much easier.”

Gladen said the culture and the increasing amount of resources make for a very collaborative entrepreneurial community in the state.

“We are doing everything we can to reduce friction and barriers,” he said. “People have very good, strong connections here.”

There are still challenges facing entrepreneurship in the state, he acknowledged.

“Access to funding is always a challenge, but it’s getting better,” he said. “It’s really important. There have been barriers to accessing capital. And, really, access to talent. The ability to find people to grow you business. We need to work to encourage people to come home to Montana because it’s a great place to do business.

"The Montana High Tech Business Alliance is raising the profile here, but it’s not just the tech people moving. There are high-paying jobs in customer support (that follow those jobs). It’s starting to become a virtuous circle, a self-sustaining system.”


Following release of the report, Gov. Steve Bullock issued a statement highlighting the importance of continuing to nurture emerging industries and encouraging innovation, key parts of his Main Street Montana Project business plan for the state.

“As Montana’s economy continues to outpace the nation, it is the entrepreneurial spirit that provides much of our state’s success,” Bullock said. “These entrepreneurs have a good idea and the courage to take the risk to make it a reality. I’m pleased that Montana continues to lead the nation in helping these innovators succeed.”

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