“Dead last,” Derrick Duldrum pronounced.
“What?” I said, abhorring as I do a sentence without a clear subject.
“Indiana,” he said. “Indiana is dead last among the 50 states in proprietorships. If you take the number of proprietors as a percent of all jobs, Indiana shows up with 18.1 percent … and that ranks us 50th among the states.”
“And from this fragment of a fact you conclude what?” I asked.
“We’re behind the rest of the nation in entrepreneurial spirit. Our people don’t have the zip and zest to undertake independent business. Or our business environment discourages them from running their own enterprises.”
“And you believe those statements?” I questioned.
“Well,” he paused, “if our entrepreneurial spirit is not deficient, if we do have the same energy and imagination as our countrymen, if our business environment is really OK, then why do we rank last in proprietors?”
“I don’t know,” I answered, “but I think we have to be cautious before we ascribe all sorts of negatives to our fellow Hoosiers.”
“You’re just trying to worm out of an unflattering conclusion about who we are,” Derrick said.
“I’m just suggesting,” I said, “that you be careful drawing conclusions from one number. Let’s look at your data.”
With this, he brought up a spreadsheet on his laptop, and we studied the numbers.
We found that the top four states in proprietorships were Montana, Idaho, Vermont and Colorado, all over 25 percent. This suggests states with extensive rural areas might have more proprietorships, more small businesses in their economic environments.
Indiana is known for having major industries that employ dozens, even hundreds of workers. Most of these firms are organized as corporations. They are not proprietorships or partnerships.
Virginia ranks very close to Indiana at the bottom of percentage of employment in proprietorships. That makes sense because Virginia has massive federal government employment, and none of those workers is the proprietor of the agencies they work for.
Derrick is working from data that are not easy to interpret. His numbers count jobs; a person can hold more than one job. He or she can be the employee of a government or a corporation and still be the proprietor of his/her own part-time business.
“Then,” Derrick said, “we shouldn’t be so gung-ho to support entrepreneurship in Indiana. All these tax-supported programs to help people start their own businesses may be unnecessary?”
“I wouldn’t go that far,” I said. “Hoosiers have a long tradition of working for big corporations headquartered out-of-state. There is a shared belief this situation is contrary to a vigorous local economy in the long run. We don’t have data to support that sentiment. However, strong programs to help businesses start up or grow efficiently should be beneficial to the economy of the state.”
Derrick pouted. “That’s all so moderate,” he complained. “I preferred saying ‘dead last’ and leaving it at that.”
Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to firstname.lastname@example.org.