Free Tuesday Trends sample: New business survival rising, WEDC mixed, ride-share services falling

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Rising

New business survival: Wisconsin routinely isn’t among the country’s best states for establishing new businesses. But those that are created tend to last here more than in other states, according to recent numbers from the U.S. Small Business Administration. The SBA statistics show just shy of 41 percent of new businesses established in Wisconsin in 2002 were still open in 2012. That’s 6.5 percent above the national average and good for 6th in the nation. Observers say although businesses surviving is generally good, they also suggest it’s connected to the same aversion to risk that keeps the number of new businesses relatively low: in 2002, Wisconsin saw 157 businesses established per 100,000 citizens, a rank that was dead last in the country.

Mixed

WEDC: The quasi-public economic development agency takes a hit in the headlines after a report shows it awarded millions to at least two companies that later outsourced jobs. The Wisconsin Economic Development Corp., created to replace the state Commerce Department in 2011, awarded up to $1 million that same year for job creation and retention to Eaton Corp. at its plant in Menomonee Falls. Last year, Eaton shifted production at its Pewaukee-based Cooper Power Systems plant to Mexico — laying off 163 — but has still received $190,000 to date from the agency. Meanwhile, in 2011 and 2012, WEDC gave up to $17 million in tax credits to Neenah-based Plexus Corp., which then eliminated 116 positions and shifted work abroad despite receiving $4.7 million in credits so far. The agency defended its retention efforts, saying 26,000 jobs were saved in its last fiscal year. WEDC had also been on the hot seat over its moratorium on historic preservation tax credit dollars, which was established last month after awards far outpaced projections. But Gov. Scott Walker this week announces the agency has partially lifted the moratorium, and WEDC says it will revamp the application process to get a “gauge on the true economic impact of each of these projects.”

See more on the lifting of the moratorium:

http://www.wisbusiness.com/index.iml?Article=327357

Falling

Ride-share services: For backers of companies like Lyft and Uber, ride-share services allow entrepreneurs to give consumers more choices through a new model of competition. To officials in the state’s two largest cities, however, they’re operating illegally. Milwaukee and Madison have been rattling sabers for months about the companies — which use smartphone apps to connect drivers and riders — arguing they’re effectively operating as unlicensed cabs and demanding they meet insurance and licensing requirements or face the consequences. The companies, however, say the traditional licensing system doesn’t fit their modern business models. Milwaukee police have hinted they may start to crack down on the services, while Madison has been sparring with the companies since they launched in the capital city four months ago; that includes a sting operation that resulted in citations for two drivers. Some question whether that’s an appropriate use of police resources considering other crime problems. Still, the city attorney gave the companies a deadline to outline the steps they plan to take to follow Madison ordinances. Failure to do so, he warned, means the city will “take any necessary additional enforcement.”