Animal spirits on the rise in Minnesota and Wisconsin

The economist John Maynard Keynes applied the term "animal spirits" to describe a sense of confidence of the entrepreneurial ilk: "The thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death" (as quoted by economist.com).

Apparently the entrepreneurial ilk in Minnesota and Wisconsin are feeling their animal spirits.

Minnesota's Secretary of State's office reported earlier this month that March new business filings were up over the same month a year ago--the third month in a row of year-over-year gains.

"In 2012, the total number of new business filings in the first quarter was 18,221 -- an increase of 24%."

Now the Federal Reserve Bank of Minneapolis has compared that to Wisconsin's new business filings.

In the Gopher State, total registrations in the first three months of this year grew by 23 percent, about twice that seen in the Badger State. Growth in both states was largely driven by new registrations of domestic and foreign limited liability companies (LLCs). Should it hold, this would be a return to the growth of LLCs seen through much of the last decade in both states. And while registrations for new corporations were flat in Wisconsin--largely continuing a long-term trend--the same trend reversed itself in Minnesota, where new corporation registrations grew by 18 percent in the first quarter and were 8 percent above 2010 levels as well.

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In all, Minnesota recorded some 18,000 new registrations in the first quarter. Compared with its easterly neighbor, Minnesota tracks many additional forms of business registrations, including assumed names, which are not incorporations of new businesses but registration of a name, possibly for use by an unincorporated sole proprietor. There were almost 4,500 such registrations in the first quarter of this year, about 6 percent more than in 2011.

You can find more background on trends in young establishments, entrepreneurship and self-employment in the Minneapolis Fed's publication, fedgazette, the cover articles in the July 2011 and January 2012, and on the "One Job at a Time" series of the Ground Level project of Minnesota Public Radio News.

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