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Oregon start-ups at 40 year low

Entrepreneurship in Oregon Plummets to Lowest Point in 40 years; Rate of Tech Startups Lags
By Oregon Small Business Association Foundation

Entrepreneurship in Oregon is currently at historic lows.

According to a recent data from state economists, the number of new Oregon businesses entering the marketplace on an annual basis is proportionally lower than at any point since the mid-1970s.
In the early 1990s, new firms comprised on average 12% of all Oregon businesses. According Joh Lehner, the report’s author, new businesses now comprises only 8% of all statewide business. That’s a 50% decline and marks the lowest level of entrepreneurship in 40 years—since the state began keeping such records.

Oregon’s not alone. The last recession put the skids on entrepreneurship levels nationwide. It’s yet to fully recover, and may not recover in the near future.

The trend has perplexed analysts, some of whom suggest that fundamental changes have occurred in the way new businesses get started that will impact the number and growth of innovative new startups.

Chief among these trends is the reduced commitment of the largest, most innovative companies to spin off promising new lines of business. Prior to the economic recession, businesses like Google, GE, and others served as an incubator for innovative ideas that turned into businesses spun off from the mothership. Today, these same companies are much more likely to keep promising, new opportunities in house.

In Oregon, this trend also holds true and bucks the narrative of an emerging center of regional entrepreneurship, particularly in the tech industry. Tektronix used to be well known for spinning out new businesses, some of which have become among Oregon’s largest employers. No more. Intel, a major player in the Silicon Forest, rarely spins off new businesses, for example. With innovation being kept in-house, Oregon’s tech employment is at its highest rate in recent years, even as the emergence of tech startups lags.

According to the Portland Business Journal, a new report out from SelfStorage.com analyzing moves to cities for tech startups and workers calls into question the draw of tech talent to Portland. The goal of the report is to understand where a vibrant tech industry is emerging outside of Silicon Valley. Cities like Raleigh, North Carolina; Austin, Texas; Salt Lake City, Utah and Kansas City all ranked ahead of Portland. Portland ranked 12th overall—disappointing for a regional city with aspirations of becoming another center of tech innovation and entrepreneurship.

Oregon’s lack of entrepreneurial momentum clearly has state leaders concerned. Earlier this spring, Business Oregon, Oregon’s economic development agency, took the bold step of appointing a new innovation chief and entrepreneur-in-residence to reposition its focus on encouraging new business growth in the state.

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