Wisconsin Policy Forum

Our latest research finds that businesses with fewer than 500 employees accounted for most of Wisconsin’s net job growth since 2010. The number of small businesses in the state expanded rapidly in the post-pandemic period, far outpacing their growth in the prior decade.

We find that small businesses play a vital role in local economies by driving job creation, fostering innovation and entrepreneurship, and contributing to local philanthropy and community identity. Wisconsin relies more on small businesses to create jobs than does the nation as a whole, even as its rate of small business employment growth has lagged the national rate since 2010.

Scaling very small businesses into larger, more sustainable enterprises remains a key challenge in our state, according to our new report, which was commissioned by commissioned by the Universities of Wisconsin Office of Business & Entrepreneurship, with financial support from the Wisconsin Economic Development Corporation. The number of micro-businesses (fewer than 10 employees) has grown rapidly, but the number of establishments with 10+ employees has increased much more slowly.

The retail trade sector has long had the largest number of small business establishments in Wisconsin. While this remained the case in 2024, retail and wholesale trade have seen the largest declines in establishments, likely a consequence of the ongoing shift to e-commerce. Recent years have seen strong growth in the number of health care and social assistance small businesses. This sector also has contributed heavily in terms of job creation.

Madison and Milwaukee serve as Wisconsin’s primary engines of small business formation and employment. Looking at the number of small establishments per capita, Eau Claire, Madison, and Sheboygan lead the way.

Our findings suggest several priorities for policymakers, economic development entities, and business support organizations. Click the link in the comments below to read about them.